Investors sell on decreasing liquidity

The selling of shares was strong last week, with growing caution as liquidity declined on both bourses. However, the market received support from foreign investors as net buyers.

Meanwhile, the benchmark indices were mixed last week, as the VN-Index on the HCM City Stock Exchange lost 0.2 per cent to finish at 505.37 points, while the HNX-Index on the northern bourse gained 0.1 per cent to reach 67.97 points.

During the first trading day of the week, the market witnessed strong selling of shares, dragging down the benchmark indices on both bourses. The selling pressure was strong on speculative stocks of construction, securities, real estate and the transport sectors, and also on blue chips.

On the HCM City Stock Exchange, the Vn-Index tumbled 1.2 per cent and the HNX-Index on the northern bourse lost 1.44 per cent on Monday.

Selling was boosted during the remaining trading days of the week and investors became more cautions when liquidity declined to a low.

An average of 67.1 million shares changed hands on the southern bourse, with an average trading value of VND1.049 trillion (US$49.9 million).

On the Ha Noi Exchange, the average trading volume reached 43.43 million shares, with a value of VND323.89 billion ($15.4 million).

Both bourses closed 2013 in the black on Tuesday trading. The VN-Index, however, lost on Thursday – the opening trading day of 2014 then reversed on Friday. On the northern bourse, the HNX-The index managed to maintain the upward trend since Tuesday, helping close the week higher.

The net buying by foreign investors helped support the market last week to ease the strong selling of shares. Foreign investors bought a net value of VND256.3 billion ($12.2 million), helping save the benchmark indices from larger losses when profit-taking occurred. PetroVietnam Drilling (PVD), HCM City Infrastructure Investment (CII) and Hoa Phat Group (HPG) attracted foreign sectors last week.

On the southern bourse, HCM City Securities (HCM), Viet Han Corporation (VHG) and Thanh Cong Garment and Textile (TCM) and PetroVietnam Building Corporation (PVX) on the Ha Noi Exchange saw large increases last week, up 9 per cent, 8.6 per cent, 8 per cent and 6.8 per cent, respectively.

According to Ban Viet Securities, there was a strong possibility that the VN-Index could fall to the 497-500 points this week, as trading volume remained low. Investors should prioritise the holdings of blue chips.

BIDV Securities also urged investors to buy blue chips when the market saw strong declines, as forecasting market fluctuations this week would be similar to last week, unless the increase in foreign stakes was still not announced.

Stock analysts also said that short-term trading to take profits would not be easy, since the Tet holiday (Lunar New Year) was approaching, causing activities to slow.

FPT Securities said that selling pressure continues to exist this week and intensify as Tet nears, urging investors to be cautious. Further, buying stocks for short-term profit-taking should be carefully considered. 

Property sales increase at year-end

Many real estate investors have been racing to launch apartment and land lot projects onto the market in a bid to attract homebuyers at the end of the year.

Nam Long Investment Joint Stock Company over a week ago introduced EHome 5 The Bridgeview in HCMC’s District 7, offering 592 apartments at around VND1 billion each.

The investor expects to launch sales of the project in mid-January but the introduction event drew much attention from homebuyers. Around 95 customers registered to buy the apartments.

PARCSpring condo project in District 2, which is jointly invested by Singapore’s CapitaLand and Khang Dien House Trading and Investment Company, was launched onto the market on December 7. The investors offered around 170 out of 394 apartments of the project at prices from VND16 million per square meter (VAT excluded).

Around 1,000 customers attended the sales opening ceremony. The investors expect to hand over the apartments to clients in the first quarter of 2014.

In addition, Hung Thinh Land Company is going to offer 8X Dam Sen condo project in Tan Phu District, targeting young customers with stable incomes.

Nguyen Duy Minh, general director of Hung Thinh Land Company, said that around 200 out of 600 flats of the project will be offered within the next few days. The condos are priced from VND13.3 million per square meter.

Explaining the condo sales at the current time, Minh said that customers always have housing demands, so investors always can find buyers. The crucial point is that investors must offer reasonable prices and convenient locations.

Meanwhile, Hung Loc Phat Production & Construction Company has launched  the sale of the second stage of Hung Phat condo project in Nha Be District. The condos are distributed through the real estate center Nam Viet.

In the second phase, the enterprise will sell 80 flats at VND14.8 million per square meter or higher. Homebuyers will enjoy a payment schedule over three years without interest.

Earlier, the investor sold 100 apartments of the first stage within six weeks. The project is expected to be completed in the second quarter of 2014.

In addition, many land lot projects have also been launched to meet demands of investors. Tac Dat Tac Vang Company has launched onto the market 200 land lots of ijc@vsip urban area in Binh Duong Province after the success of the first launch a month ago. The land lots are from VND3.3 million per square meter.

Kim Oanh Company has also offered land lots in Binh Duong Province, while Sacombank Real Estate Joint Stock Company has launched Arista Villas land lots in HCMC’s Thu Duc District.

Marc Townsend, general director of CBRE Vietnam Company, said that the condo market has seen positive moves after staying quiet for a long time.

The enterprise’s statistics show that around 1,700 apartments were launched onto the market in the third quarter of 2013, up nearly 46% against the previous quarter. Low-cost condos accounted for 72% of the new supply.

FrieslandCampina helps farmers produce clean milk

FrieslandCampina Vietnam Company better known for the brand of Dutch Lady has clinched a deal on fresh milk purchase and cow breeding technique supports with over 4,000 cow farming. The contract aims to help farmers breed cows under three quality criteria: safe feed, clean water and healthy cows. Accordingly, the enterprise purchases 240 tons of raw milk from farmers every day while it is able to control the quality of the milk provided by each farming household.

As per the technological process guided to farmers, the raw milk is frozen immediately, securing a low ratio of bacterial counts, shortening heat treatment time and maintaining freshness and nutritious contents of the product.

Each milliliter of fresh milk has to pass strict quality tests for bacteria counts and nutritious facts such as protein and fat. Before being transported  to the factory, the fresh milk must be free from any antibiotic residues and toxic additives.

To meet these strict requirements,  fresh milk must be treated with latest advance technologies and follow strictest food hygiene standards of FrieslandCampina Vietnam As a renowned business with the Dutch Lady brand, FrieslandCampina Vietnam has applied serious fresh milk quality checking process from  feed, water and living environment, cow health to breeding methods and milk  cooling. Therefore, the enterprise has ensured that fresh milk supply in Vietnam has met leading standards of the Netherlands.

According to FrieslandCampina Vietnam, fresh milk standards include many factors such as quality and freshness of material milk. However, to offer a standard glass of milk to consumers, the enterprise has undergone a processing and production process with  strict quality criteria. People who are interested in the dairy industry development program of FrieslandCampina Vietnam over the past 17 years are not surprised that hygiene and safety standards of fresh milk supply in Vietnam has reached the leading position in Southeast Asia. The bacterial counts in locally-made raw milk stay at 300,000 cfu/ml, three times lower than the Vietnam quality.

To obtain these achievements, FrieslandCampina Vietnam has made much effort on the sustainable dairy development program. Thanks to cooperation and quality commitments of over 4,000 milk cow farming households in many localities, the enterprise is confident at bringing the best quality milk products to consumers.

Over the past 17 years, the enterprise has affirmed that its input milk supply has reached the best quality standard. Besides cooperation with farmers to turn out high-quality milk products, FrieslandCampina Vietnam also shoulders the mission to instill trust in consumers through the products selected.

Banks shy of unsecured loans

Failing to collect many debts due to insolvency of enterprises and making provisions, banks have now been more cautious about providing unsecured loans.

According to an executive at Dong A Bank, unsecured loans are only offered to reputable enterprises which have high credit ratings and do not owe overdue debts.

Besides, the lending limit is lower as banks are concerned over such loans turning bad debts.

In the case of collateral loans, banks can handle mortgaged assets in case of default, while in the case of unsecured loans, banks will have to set aside sums as provisions to cover such debts.

The chairman of a small bank said that after seeing banks suing a coffee trading enterprise, banks have turned hesitant in making loans, even those loans secured by mortgaged movable assets, let alone unsecured loans.

Meanwhile, many banks used to be willing to offer unsecured loans to enterprises, especially to exporting ones due to rapid loan payments and good results of exporting activities. However, exports are in difficulty and some exporters failing to pay debts have taken flight.

Besides, there are many cases in which bank employees are criminalized as borrowers become insolvent, making the door to unsecured loans narrower.

Sharing the same opinion, deputy governor of the central bank Nguyen Phuoc Thanh said that although the central bank had encouraged banks to make more loans to enterprises by making regulations more liberal, lenders still dared not risk their capital.

In addition, though business and production plans of enterprises may look feasible, it is not certain that such enterprises can pay debts. As a result, banks have become more cautious in offering loans to those with bad debts and extending unsecured loans.

According to Thanh, banks will remain cautious next year. Once banks have not finished solving bad debts and profit is not their top target, loosening borrowing requirements is impossible as it will be harmful to both enterprises and banks.

It is therefore not easy to get access to bank loans without mortgaged assets. Besides, small and medium enterprises are no longer allowed to borrow via credit guarantee funds as enterprises are required to mortgage assets at such funds if wanting to borrow money.

SCB launches MasterCard credit card

Saigon Commercial Bank (SCB) introduced SCB MasterCard to local customers last Friday, making it the 30th lender in Vietnam issuing international credit cards.

SCB MasterCard holders can pay for goods and services in Vietnam and overseas and conduct online transactions. The bank provides customers maximum credit limit of VND1 billion and give interest exemptions within 45 days after transactions.

Besides, cardholders are able to control their transactions via SMS Banking service and pay for debts through various channels.

In Vietnam, 30 out of 39 banks under the Vietnam Banking Card Association have issued international credit cards.

MasterCard, Payoo facilitate bill payments

MasterCard and Payoo, an online bill payment service provided by VietUnion, clinched a deal on Thursday allowing MasterCard holders to pay for goods and services on Payoo’s websites and at point of sale (POS) terminals.

Holders of MasterCard credit, debit and pre-paid cards now can pay for electricity, water, telephone, cable television and Internet bills.

Next year, customers can pay for the services at POS terminals of Payoo in the country, according to a statement released by Payoo.

Technical teams of both sides are trying to finish applications enabling bill payments with mobile phones.

Bill payment services for MasterCard holders are available at paybill.com.vn and

EVN awards huge EPC contract to consortium

Electricity of Vietnam Group (EVN) on Monday cut a deal to award an engineering-procurement-construction contract worth US$1.36 billion to a consortium grouping both international players and local partners.

Under the agreement, EVN assigned Package No. 4 to build the main plant of Vinh Tan 4 Thermo-power project to the consortium, which comprises of South Korea’s Doosan Heavy Industry, Japan’s Mitsubishi, Thai Binh Duong Joint-Stock Corp., and another local construction firm named PECC 2.

The value of the EPC contract is US$1.36 billion, with 85% coming from loans given by South Korean banks Kexim and Ksure and Japan Bank for International Cooperation, while the balance is reciprocal capital at home. The total cost for the project is VND36.7 trillion, or roughly US$1.8 billion.

The power plant, with two turbines, has a capacity of 1,200MW, and is located in Binh Thuan Province some 250km south of HCMC.

The coal-fired power plant will be commissioned between 2017 and 2018, able to supply 7.2 billion kWh each year to the national power grid.

Work will start on the project in January, and the first turbine will be operational after 46 months of construction. The second turbine will be commissioned six months later.

More hydropower projects to be canceled

The Ministry of Industry and Trade will continue to check hydropower projects, especially small ones, to eliminate those that are deemed inefficient and harmful to residents and the environment.

According to the draft resolution on enhancing management and planning of hydropower projects discussed on Monday at the online meeting between the Government and localities, the management of hydropower projects over the past time shows the loose State management.

With projects that have been finished but not satisfied regulations on project quality, dam safety, forest planting, environmental protection and the like, the ministry may revoke the power generation certificates.

According to a report presented by the ministry on Monday, Vietnam currently has 1,239 approved hydropower projects having a total capacity of 26,012MW.

After checking many projects, localities nationwide and the Ministry of Industry and Trade have crossed out six terraced projects (395 MW) and 418 small ones (1,175 MW). Besides, 172 potential locations suitable for hydropower projects (375.6 MW) will not be considered.

Besides, provinces have temporarily suspended four terraced projects (208MW) and 128 small projects (915.7MW). The remainder with 149 small projects (1,345MW) and nine terraced ones (551MW) is being inspected.

Therefore, there are 815 projects left with a total designed capacity of 24,324MW. Among these, 268 projects (14,240MW) have been operational while 205 others (6,198MW) will be put into operation between now and 2017.

According to the ministry, operational hydropower projects have contributed VND6.5-7 trillion in value added tax, water resource tax and environment fee.

Nearly 40% of the dams of small projects whose capacities are smaller than 30MW have not been tested and 78% of the dam owners have not prepared flood prevention plans.

White-leg shrimp still favored despite ministry’s concerns

The Ministry of Agriculture and Rural Development has expressed concerns that the farming area of while-leg shrimp will continue to rise next year, making diseases on shrimps easily recur.

According to the ministry, farming shrimps at unqualified places is the cause of disease recurrence.

Nguyen Van Nhiem, chairman of the My Thanh Shrimp Association in Soc Trang Province, said that concerns of the ministry stemmed from farmers preferring white-leg shrimp to tiger prawn.

It is because the life cycle of white-leg shrimp is much shorter, as it can be harvested after only three months, and furthermore, the productivity is much higher compared to tiger prawn.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (Vasep), once told the Daily in an interview that consumers had started to get familiar with products processed from white-leg shrimp and the demand was on the rise, resulting in the higher export of white-leg shrimps compared to tiger prawn.

“As consumers of foreign markets still favor white-leg shrimp, farmers will continue to raise this kind of shrimp for export processing,” Hoe said.

According to statistics of the ministry, as of end-November Vietnam’s shrimp farming area was nearly 653,000 hectares, with white-leg shrimp accounting for nearly 64,000 hectares and over 243,000 tons and tiger prawn nearly 589,000 hectares and 233,000 tons. It can be seen that the productivity of white-leg shrimp is nine times higher than that of tiger prawn.

The shrimp export value in the January-November period was US$2.5 billion, up 33% year-on-year, with over US$1.2 billion contributed by white-leg shrimp, over US$1.1 billion by tiger prawn and the rest by other kinds of shrimp.

According to Pham Anh Tuan, deputy director of the Directorate of Fisheries, it is likely that supply of white-leg shrimp from China and Thailand will increase next year as the early mortality syndrome (EMS) has been partly put under control, and thus when the supply rises, it will push down the price of white-leg shrimp.

Nhiem from the My Thanh Shrimp Association said that white-leg shrimp was priced at VND200,000 per kilogram early this month, equivalent to that of tiger prawn of the same quality.

According to the Directorate of Fisheries, the farming of white-leg shrimp was piloted in Vietnam in 2001 and this kind of shrimp started to be farmed widely in provinces in January, 2008.

Hepza says more enterprises shut down business

The HCMC export processing zones and industrial parks authority (Hepza) says the number of enterprises in such concentrated production zones shutting down business this year has still been on the rise.

This year to date, 20 such enterprises have suspended operations, including 13 foreign-invested enterprises with total capital of US$18.38 million and seven local firms with combined chartered capital of VND122.8 billion.

In addition, there are up to 32 enterprises performing business liquidation before the expiry, including five foreign-invested enterprises, Hepza said. The watchdog explained that most enterprises liquidating business before terms have operated perfunctorily or have scaled down business.

Last year, there were only 15 enterprises liquidating business before the expiry date.

In its report, Hepza also stated that 35 enterprises have scaled down business by 20%-30% compared to designed capacities, including 15 foreign-invested firms.

The dreary business by enterprises in such IPs and EPZs is also reflected by the dwindling purchase of goods and materials from the local market.

Such enterprises have purchased only US$250 million worth of goods and materials from the local market this year, a sharp

fall of 30% from last year. Meanwhile, their imports of goods and materials from overseas markets have totaled US$3.8 billion, some 7.3% short of target although it posts a slight increase of 7% year on year.

However, the total export revenue from these zones still reaches an estimated US$5.1 billion, a rise of 13% on year.

There are currently 1,275 projects still valid in EPZs and IPs in HCMC with total registered capital of US$7.78 billion, including 504 foreign-invested projects worth a total US$4.71 billion.

Metro Line No. 1’s last package to kick off next year

Contractors will commence work on the last package of Metro Line No. 1 linking Ben Thanh Market in District 1 with Suoi Tien in District 9 at the end of next year to complete the project in 2017, according to the HCMC Urban Railway Management Authority.

Le Khac Huynh, deputy director of the unit, on Monday told the Daily that among three packages of the project, only package No. 1, a 2.6-kilometer underground section connecting Ben Thanh Market and Ba Son Shipyard, has yet to be constructed. The city is organizing an auction for the package and expects to start work on the project next year.

Package No. 2 stretching over 17 kilometers along Hanoi Highway is under construction. On December 21, contractors commenced work on the bridge across the Saigon River.

Metro Line No. 1 is expected to be just about finished in 2016 and officially start operating in 2018.

Concerning fine reduction due to slow site handover, Huynh said that the issue is under negotiation with contractors. Land handover is expected to finish at the end of December to minimize the fine.

Given the contract signed with contractors, the city’s government should have handed over land at the end of 2012. However, due to slow site clearance, the HCMC Urban Railway Management Authority has delayed land handover to Sumitomo-Cienco 6 contractor consortium on many occasions.

According to a notice on October 25, the city had to bear a fine of around VND2.5 billion each day. This fine has caused big losses to the State budget and affected the city’s prestige in the eyes of donors and foreign contractors.

Japan provides US$447 million for two projects

The Japan International Cooperation Agency (JICA) on Tuesday signed agreements with the Ministry of Finance to lend US$447 million to two infrastructure projects in the country.

The loans will be used for construction of the Mai Dich-Nam Thang Long section of Hanoi’s belt road No. 3 and Terminal No. 2 at Noi Bai International Airport.

The signing of the official development assistance (ODA) loans is the outcome of a diplomatic note exchange between the two nations during Prime Minister Nguyen Tan Dung’s official visit to Japan earlier this month.

Speaking at the signing ceremony, JICA chief representative Mutsuya Mori said Japan expected the projects to be developed as scheduled.

This is the 21st consecutive year the Japanese Government has provided ODA for Vietnam. Its ODA commitments now total US$21 billion.

Binh Thuan wants Ke Ga Port project shelved for good

Binh Thuan Province on Tuesday asked the Government to axe Ke Ga Seaport project that has been put on hold for nearly one year as project owner TKV deemed it ineffective given the low price of bauxite ore.

TKV, or Vietnam National Coal and Mineral Industries Group, had been licensed to build the seaport specially designed for transporting alumina for export, but the group relinquished the project early this year citing low feasibility. The Government has approved TKV’s stance to temporarily shelve the project.

Le Tien Phuong, chairman of Binh Thuan Province, told an online meeting of the Government on Tuesday that central authorities should remove the project for good to help the local government settle all problems arising from the seaport project.

The status quo of the seaport project if further extended will be costly and make it difficult for the provincial government in allocating land to 12 tourism project owners whose land plots had been recalled to make room for the seaport project, Phuong said at the meeting.

Binh Thuan Province authorities do not know whether to reallocate land to tourism project owners or not because if the Government gives blessing to the seaport project again, that will be even more costly in compensation.

“Binh Thuan Province now proposes the Government and related ministries and agencies abolish the seaport project instead of a provisional suspension… The longer the project is adjourned, the bigger cost the province will have to shoulder,” Phuong said.

Deputy Prime Minister Hoang Trung Hai at the meeting asked the Ministry of Industry and Trade to make a full report on the issue for the Government’s consideration.

TKV after several times delaying construction kickoff on the seaport project made an abrupt announcement early this year to indefinitely put it on hold. The group said the construction of a deep-water seaport at Ke Ga for alumina export would not be suitable in technical terms, and would not be cost-effective as the alumina price on the global market remains low.

The total cost for the seaport project, according to TKV, would amount to VND8 trillion, or nearly US$400 million, a colossal sum at a time of big economic challenges like now.

Earlier, 12 resort projects around Ke Ga Cape in Binh Thuan Province’s Ham Thuan Nam District had been forced to stop operations to leave space for the seaport project. Binh Thuan Province and TKV after that agreed to compensate all damages caused to properties at those projects.

The cost of damages, according to project owners in a letter of complaint in 2012, amounted to VND800 billion. By April 2008 when the provincial government forced resort projects to suspend operation or construction, only one project had been put into operation while the others, some of them large-scale ones, were either nearing completion or under construction.

Samsung eyes Vung Ang III power project

Representatives of the South Korean group Samsung had a working session with the government of Ha Tinh Province last week on the investment plan of Vung Ang III thermal power center.

A source of the provincial government told the Daily that Samsung planned to invest in Vung Ang III.1 and Vung Ang III.2 power centers having a total capacity of 2,400MW. Samsung looks for Ha Tinh Province’s support to soon have a decision of the Ministry of Industry and Trade and then take the next steps.

According to the source, Samsung has studied six locations to develop coal-fired thermal power projects and intends to choose Vung Ang as it is the best site among the places Samsung has inspected in Vietnam.

On October 14, Samsung wrote to the Ministry of Industry and Trade informing its intent to invest in Vung Ang III thermal power center.

After inspecting several power projects such as Quynh Lap 2 in Nghe An Province, Quang Trach 2 in Quang Binh Province, and Song Hau 3 and Kien Luong in Kien Giang Province, Samsung shows stronger interest in the Vung Ang III project.

Having a capacity of 2,400MW, Vung Ang III was previously proposed to be split into smaller projects to quicken implementation.

Samsung’s commitment to investing in Vietnam’s power industry was asserted when Samsung C&T signed a memorandum of understanding with the Ministry of Planning and Investment on developing infrastructure in Vietnam in late September.

The memorandum of understanding opens up many opportunities for Samsung to participate in projects in other sectors like power, shipbuilding, airport, oil refinery and information technology besides pouring billions of dollars in electronic and cell-phone projects.

Jewelry sells well at year-end

While demand for gold bars remains low, the jewelry market has heated up due to falling gold prices and strong demand during the wedding and holiday seasons at the year-end.

Nguyen Ngoc Trong, sales director of Phu Nhuan Jewelry Company (PNJ), said that now is the high season for jewelry purchase, prompting PNJ to launch new products to meet customer demands. Over the past two months, jewelry sales at PNJ have jumped by 30%.

Trong said that the jewelry market has seen positive improvements compared to the same period last year. Total sales in the last two months are expected to increase 20% year-on-year.

As gold prices have strongly declined in 2013, many consumers have calculated to buy jewelry to wear or to keep as a family heirloom, he added.

In addition, jewelry demands have also picked up during the wedding season at the year-end. PNJ has sold a lot of jewelry sets as wedding presents in recent times.

Meanwhile, Saigon Jewelry Company (SJC) has focused on jewelry production and business since last year. Currently, the enterprise is speeding up advertising for SJC Diagold brand.

Pham Quoc Dung, director of the high-class brand, said that launching the brand amid the high season has helped raise sales of the products.

However, commenting on the jewelry consumption at SJC in the fourth quarter, Dung said that revenue has increased strongly compared to the first half of 2013 but is only equal to the same period of 2012.

However, jewelry sales would keep on rising until the end of the first quarter of 2014 thanks to Lunar New Year, or Tet, Valentine’s Day and International Women’s Day, he said.

Meanwhile, the gold bar market has seen buying power weakening since early this year.

Nguyen Cong Tuong, SJC’s deputy sales director, said that buying power has contracted around 60% this year even though gold prices have tumbled.

As the world economy is expected to recover next year, gold is no longer a safe haven for investors. People are turning their back on gold as they fear further price declines.

Most financial institutions predict gold prices to oscillate between US$1,250 and US$1,300 an ounce in 2014. Gold prices have averaged out at US$1,350 an ounce this year.

Trong of PNJ said that the enterprise has sold 300 to 400 gold taels each day this month compared to last year’s figures from 800 to 1,000 taels.

SJC on Tuesday quoted gold prices at VND35 million and VND35.1 million a tael for buying and selling respectively. Meanwhile, the price of the precious metal dropped US$5 to below US$1,200 an ounce on the New York market overnight.

Local gold prices were around VND4.5 million higher than the world price for a tael. The gap was VND4 million a tael early last week.

Chevron explores business opportunities in south

Chevron Lubricants Vietnam Limited is sounding out business opportunities in southern Vietnam, with more efforts for HCMC, after the company has established a firm foothold in the north.

Le Van Khai, general director of Chevron Lubricants Vietnam Limited, told the Daily that the company had invested some US$1 million in enhancing the production line and storage capacity of its factory in the northern port city of Haiphong.

The company, which is marketer of the Caltex Delo and Havoline brands of engine oils, lubricants and coolants, has commissioned the factory in Dinh Vu Industrial Zone for years, with an annual designed production capacity of 15 million liters of lubricants. This is one of the reasons why the company has gained a more solid stance in the north than in the south.

To further tap into the south, Khai said Chevron Lubricants Vietnam would spend more on marketing and building a strong distribution network in the southern market in order to reach out to more customers.

Khai said that the company would hire more employees for expansion in the south.

“We see more opportunities to expand our business in different segments, from cars to motorcycles in the south in 2014,” Khai said. “Cars are the market segment for future growth.”

The expansion plan of Chevron Lubricants Vietnam is supported by economic indicators and the recent move of HCMC authorities to slash the registration fees from the current 15% to 10% on under-ten-seat vehicles effective on January 1.

With the lower registration fee together with changes in tax policies as well as economic recovery, the Vietnam Automobile Manufacturers’ Association (VAMA) expected auto sales could reach 109,000 units this year, which are much higher than the some 93,000 units sold last year.

Khai said despite challenges, Vietnam’s growing economy was offering more opportunities for Chevron Lubricants Vietnam to capitalize on. He added that the company achieved a double-digit growth rate in volume this year and would maintain this momentum in 2014.

FDI approvals higher than expected

The nation’s fresh foreign direct investment (FDI) approvals had amounted to US$21.6 billion in the year to mid-December, a year-on-year pickup of 54.5%, beating the Ministry of Planning and Investment’s earlier forecast.

According to the General Statistics Office (GSO), there were nearly 1,300 new projects licensed with total registered capital of US$14.3 billion, up 70.5% year-on-year and 472 operational projects got approval to inject an extra US$7.3 billion, up 30.8%.

The Ministry of Planning and Investment’s 2013 FDI target is only US$14 billion. GSO has yet to gather data about the projects whose investment licenses have been issued this month by provincial authorities.

FDI disbursements are estimated at US$11.5 billion this year, a 9.9% year-on-year increase. The figure was slightly higher than the ministry’s target at around US$10.5-US$11 billion.

Industrial processing and manufacturing remained the most attractive sector with US$16.6 billion, accounting for 76.9% of total FDI approvals. Power generation and distribution, gas and water supply, and air conditioning followed with US$2 billion, accounting for 9.4% of total FDI capital. The other sectors accounted for 13.7% with US$3 billion.

Notably, more foreign capital is flowing into other provinces than HCMC, Hanoi and Binh Duong. Thai Nguyen Province for the first time attracted the most FDI capital with over US$3.38 billion, accounting for 23.7% of the total, followed by Binh Thuan with US$2 billion (14.2%), Haiphong with US$1.8 billion (12.9%).

Among 50 nations and territories with new investment licenses in Vietnam, Korea was the biggest investor with over US$3.7 billion, making up 26.3% of the total. Singapore came next with over US$3 billion, China nearly US$2.3 billion, Japan nearly US$1.3 billion and Russia US$1 billion.

Mekong Delta’s tra fish undersupply affects exports

Many factories in the Mekong Delta now are suffering live tra fish undersupply which may badly affect the country’s exports from now until next year, according to the Vietnam Association of Seafood Exporters and Producers (Vasep) and local processors and exporters.

Numerous tra fish processing factories in the delta are currently struggling to maintain operation owing to the shortage of materials, Duong Ngoc Minh, vice chairman of Vasep, said. The undersupply will continue into the first months of 2014, he forecast.

Vasep had earlier forecast tra fish export value to decline by some 5% next year compared to 2013 as material supply is decreasing and seafood companies have still found it hard to ask for bank loans.

According to local exporters, there are around 70 tra fish processing plants in the delta and less than 30 of these plants have material supplying zones that are only able to provide a part of necessary materials. Plenty of factories in the region, meanwhile, still depend on supply from farming households while multiple farmers are also currently mired in troubles.

Nguyen Ngoc Hai, head of Thoi An Cooperative in Can Tho City, reported that lots of members in the cooperative had abandoned farming areas in the context that enterprises have failed to pay them, while banks have stopped lending to tra fish farming and the production cost is higher than the selling prices.

The director of a tra fish exporting company who declined to be named told the Daily that many farming households as the partners of his firm have been confronted with countless difficulties this year.

“Given business difficulties, our company has had to manage to make profits to pay dividends to shareholders and pay Tet bonuses to workers instead of sharing difficulties with the associated farmers and providing them feed purchasing money like in previous years,” he explained.

Tra fish exports brought home some US$1.7 billion in 2012, dipping 3.4% year-on-year, and are expected to reach US$1.8 billion this year, the Vietnam Directorate of Fisheries reports.

VASEP concerned about shrimp farming rise

The country’s shrimp export sector has been faring well but the Vietnam Association of Seafood Exporters and Producers (VASEP) has expressed concerns about an uncontrolled expansion in the farming of white-legged shrimp.

VASEP general secretary Truong Dinh Hoe told the Daily that strong growth in shrimp cultivation could help meet market demand. However, if shrimp farming spirals out of control, farmers and enterprises will suffer losses due to an oversupply.

The Vietnam Directorate of Fisheries has warned that shrimp prices might drop next year when the shrimp farming sector in China recovers, thereby plunging local enterprises into troubles.

Therefore, the Government should ask farmers to choose suitable farming methods, follow planning and get updates about market demands to adjust farming in an appropriate manner, Hoe said.

Recently, the Vietnam Directorate of Fisheries has set up a working team to inspect production facilities and breeding shrimp providers. The State should strengthen control of imported breeder shrimps; otherwise, substandard breeder shrimps could cause heavy losses to farmers, Hoe said.

VASEP expects that seafood exports in 2014 would be strong as global demand would continue growing. This year, shrimp export value is projected to rise 30% from a year ago to US$3 billion.

According to the Ministry of Agriculture and Rural Development, thanks to strong growth in the shrimp farming area, white-legged shrimp exports have surpassed those of tiger shrimp in terms of volume and value this year.

By the end of November, Ben Tre, Long An and Tra Vinh provinces had reported pickups of 30-50% in white-legged shrimp output against the same period of 2012. In Soc Trang Province, shrimp output reached 44,000 tons, a record high in the country and three times higher than in 2012.

VASEP’s data show that white-legged shrimp exporters fetched nearly US$980 million in the Jan-Sept period in 2013, up by 85% year-on-year. Meanwhile, tiger shrimp export value only rose 4.8% to US$943 million.

Shrimp farmers and enterprises have also gained strong profits thanks to high prices this year. According to Long An Province’s Department of Agriculture and Rural Development, white-legged shrimp is around VND140,000-150,000 per kilo, enabling farmers to earn around VND100-150 million per hectare.

Rural farmers cash in on cocoa market surge

In Central Highlands Dak Lak Province, a certain crop is having a big impact on the lives of local ethnic communities - it is cocoa.

Although cocoa is still only one of seven top agricultural plants in the region, the newly imported plant has spread far and wide in a place where cashew nuts and coffee were previously seen as the mainstay of the province's agricultural industry.

With surging demand from Asia and shrinking production in West Africa, a global shortfall in cocoa output of around 160,000 tonnes in 2013 and about 1 million tonnes will occur by 2020, according to Dinh Hai Lam, cocoa development manager at MARS Incorporated.

With multinational companies the likes of Cargill and Mars wanting to grab their slice of Viet Nam's emerging cocoa industry, despite it yielding only 6,700 tonnes of beans per year, an opportunity has emerged for Dak Lak farmers to cash in on this market driven frenzy and dramatically to improve their standard of living.

For Hbim Kbrong, a M'Nong woman in Yang Tao Commune's Phok Village, her new cocoa crops have transformed her livelihood after she decided to replace her family's poor-yielding coffee crops with cocoa in 2007.

In the sand-laden area of Yang Tao commune in LaK District, locals used to depend on short-term plants like corns or cassava to supplement poor returns from coffee. However, all this has changed since cocoa was introduced through the Sustainable Cocoa Enterprise Solutions for Smallholders (SUCCESS) Alliance programme in Viet Nam.

The programme, a public-private partnership driven by USAID, USDA, the World Cocoa Foundation, Mars Inc. and ACDI/VOCA, provided Hbim's family and nearly 40 others between 150 and 200 young cocoa plants each, fertiliser and technical training on how to grow cocoa plants.

After just three years, her cocoa garden was providing 400 kilos of dried-cocoa beans. She sold the beans and received more than VND22.4 million (approximately US$1,060) for her efforts.

"That was the most money I'd ever had at that moment," said Hbim.

Hbim's life has improved in leaps and bounds from that moment thanks to a regular source of income from cocoa. She says that her family used to ‘live in misery' when they had to collect firewood and bamboo shoots from the forest and trade them for rice in the dry season.

"The cocoa usually provides beans for 9-10 months a year. Now, I have a regular source of income to buy food, clothes, meat and fish for my family. My son can go to school and I have time to participate in community social activities such as the commune's women's and farmer's unions," said Hbim.

Hbim said she received more than VND70 million ($3,300) from her 400 cocoa plants in 2012 and her family's income will double in coming years when all 900 cocoa plants start producing beans.

She has managed to save VND125 million ($6,000) to build a house, pay for her daughter's wedding and buy more land for her cocoa garden.

Hbim's family is one of 80 households (approx. half of the commune) who have escaped poverty thanks to cocoa farming.

But Hbim hasn't stopped there. She is also now leader of the commune's cocoa growing club, organising monthly meetings to discuss cocoa growing techniques and share valuable knowledge.

In Lak Commune there are now 262 hectares of cocoa land belonging to 45 cocoa clubs with more than 2,100 participating farmers.

The impetus to raise incomes has also led to innovations in growing hybrid crops, with farmers in neighbouring Eakar district planting cocoa trees alongside cashew nuts.

The model has showed remarkable results with 200 members now growing 350ha of cocoa and cashew nuts in hamlet 12 alone. In 2013, the district harvested 80 tonnes of dried cocoa beans.

"No other plants beside cocoa would be planted in cashew nut gardens. Cocoa plants have doubled my income to VND60 million ($2,900) per hectare," said co-operative chairman Thai Xuan Quang.

"Coffee is still the number one plant in Dak Lak. However, cocoa has showed it's a strong competitor when it is grown alongside other plants or in small plots," said the province's agriculture and rural development deputy director Huynh Quoc Thich.

Thich highlights an important point that Dak Lak still faces difficulties developing cocoa farming due to a shortage of land, capital and technical support for farmers with no experience growing the plant.

In spite of this, there are positive signs this plant will continue to make it's mark on Dak Lak. The province currently has 2,500ha of cocoa and there is even a master plan for 6,000ha of cocoa farming to be implemented by 2015.

The Ministry of Agriculture and Rural Development's Cultivation Department has also recently said cocoa farming has increased from 9,000ha in 2007 to more than 22,000ha across the country, with growth mainly concentrated in the Central Highlands, south-eastern and Cuu Long (Mekong) Delta provinces.

"It presents a great opportunity for Viet Nam to become one of the world's major cocoa suppliers. There are opportunities here for all cocoa growers," said Lam.

Vietnam ships first batch of canned quail eggs to Japan

A quail breeding farm and a fruit exporter in Tien Giang have joined hands to export their first batch of quail eggs to Japan, a sweet result of their four-year effort to meet all requirements of the strict East Asian market.

Nguyen Ho Farm and Tien Giang Food Corp said a container of some 1.3 million canned quail eggs are arriving in Japan, and they are hurriedly preparing for the second shipment to be completed before the Lunar New Year.

Tran Nguyen Ho, owner of the farm, said there is huge demand for canned quail eggs in Japan.

In Japanese cuisine, quail eggs are sometimes eaten raw or cooked to make tamago, a type of omelette made by rolling together several layers of cooked egg often found in sushi and bento lunches. They are also common in ramen dishes.

But Ho admitted that the export volume is modest because his farm is the only Vietnamese facility that meets the Japanese partner’s requirements, which he deemed “a great pity.”

The farm owner said it took the two countries four years, with a number of working sessions and intense supervisions and checks, to settle the first shipment.

One of the requirements is that the yolk should be exactly in the middle of the egg rather than on the left or right side.

Steel consumption seen growing 3-5% in 2014

As industries with big demands for steel such as shipbuilding, auto, mechanical engineering and construction will not prosper in 2014 as predicted, next year’s total steel sales will be only 12.2-12.5 million tons, a year-on-year rise of 3-5% only, said Pham Chi Cuong, chairman of the Vietnam Foundry & Metallurgy- Science and Technology Association.

In a report on the steel industry’s prospects in 2014 sent to the Daily on Thursday, Cuong, who is also former chairman of the Vietnam Steel Association, estimated the country’s economy to change for the better next year owing to State macroeconomic policies.

However, such policies have yet to tackle the current difficulties of local firms, with next year’s gross domestic product (GDP) growth projected at only 5.8%, meaning the deployment of new investment projects will be limited, he remarked.

The real estate market will still be frozen as the demand stimulus package worth VND30 trillion has failed to prop up the market, Cuong said.

Other major steel consumers such as shipbuilding, auto manufacturing and mechanical engineering are still far from prosperity, so steel consumption will barely increase next year, he noted. The sales volume of steel products is forecast to total 11.8 million tons in 2013.

Total designed production capacity of the local construction steel segment amounts to 11.3 million tons annually while its operational capacity is seven million tons a year, Cuong reported.

Local construction steel sale volume posts nearly five million tons this year, falling about 500,000 tons compared to the 5.5 million tons recorded in 2012.

As the local steel demand is to remain low next year, domestic companies will continue facing fierce competition and more enterprises will have no other choice but to close production when failing to compete with others with higher capacity and lower production costs.

Banks target familiar clients to boost credit

Instead of offering cheap loans to all potential clients to simulate credit growth as had been done in 2012, commercial banks towards the end of this year are instead targeting clients with specific credit packages.

LienVietPostBank agreed to provide a VND2 trillion ($95 million) loan for the PetroVietnam-invested Vung Ang 1 Thermal Power Plant this month.

Vietcombank and SeABank this month signed a credit agreement worth $150 million with Petrovietnam Exploration and Production Corporation. Vietcombank will provide 83.5 percent of the funding with the remaining $24.75 million covered by SeABank.

TPBank signed an agreement providing VND2 trillion ($95 million) to Vietnam Railways to bolster the company’s working capital.

Sacombank, Agribank, MHB, OCB, Military Bank, ACB, NamABank, Navibank, VietinBank and DongABank also granted VND289 billion ($13.7 million) to 34 enterprises in Ho Chi Minh City’s Go Vap district alone.

While this is by no means a new approach, targeted credit packages have become more common this year. At the end of last year, to meet the greater year-end demand for capital, many banks offered VND1 trillion-VND10 trillion ($47.5 million-$475 million) in loans at 7-9 per cent interest. However, disbursement was slow as many firms could not afford to take on extra debts.

According to experts, targeting specific customers with real need for capital will help banks ensure their credit growth for the future. The agreements are also often characterised by long-term mutual benefits, including the banks providing additional financial services.

In addition, this closer co-operation means greater trust and the likelihood that banks will be inclined to extend credit to other projects.

When talking about the recent PetroVietnam-LienVietPostBank credit agreement, PetroVietnam’s chairman Phung Dinh Thuc said this was the first project between the state-run oil and gas giant and the bank. PetroVietnam was implementing several petrochemical, industrial gas and electricity projects and LienVietPostBank would act as one of the group’s most important financing partners.

However, Dang Ngoc Ha, strategy deputy director of VietA Bank said the approach might meant that capital would fail to be allocated effectively if banks tended to only focus on major clients, especially enterprises with close relationships to the banks.

However, Governor of the State Bank of Vietnam Nguyen Van Binh praised the move, claiming credit growth might hit 10 per cent by the end of the year.

The Vietnam Asset Management Company (VAMC) also bought nearly VND35 trillion ($1.66 billion) of non-performing loans (NPLs), which had acted as a barrier for credit growth. “The purchase of NPLs, together with efforts to restructure debts and settle NPLs via greater risk provision has contributed to GDP growth of 5.4 per cent this year,” said Binh.

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