AIA Vietnam expands into Gia Lai Province

US life insurer AIA Vietnam has opened a general agency office in Gia Lai Province to add to those put in operation last year in Ha Tinh, Phu Tho, and Quang Nam provinces and Son Tay township in Ha Noi.

TRUSTBank to have strategic partner

The Long An Province-headquartered Dai Tin, or TRUSTBank, will have a strategic foreign partner after it increases its chartered capital by VND2 trillion (US$100 million) this year, according to a company official.

Chairman Hoang Van Toan told Viet Nam News a contract had been concluded with First Gulf Bank of the United Arab Emirates for the latter to become the bank's strategic shareholder when it increase its capital from the current VND3 trillion.

Toan said that there would be other potential partners but disclosed no details during yesterday's inauguration of the bank's new asset management affiliate company, the TRUSTAsset.

Saigon Invest Group selected as growth company

The Saigon Invest Group (SGI) has been selected to be a member of the World Economic Forum’s Advisory Council for Global Growth Companies, becoming the first Vietnamese firm to gain such a position.

The move shows that the world appreciates and values Vietnam as a country with high growth and potential opportunities for development, SGI Chairman Dang Thanh Tam told a Vietnam News Agency correspondent on the sidelines of the 41st WEF annual meeting in Davos on January 29.

The Ho Chi Minh City-based group is one of the leading developers of industrial parks, high-tech parks, urban zones and other business fields in Vietnam.

VinaCapital fund to sell stake in liquor producer

VinaCapital Viet Nam Opportunity Fund Limited (VOF), an AIM (Alternative Investment Market) -quoted investment vehicle, plans to sell a 23.6 per cent stake in Ha Noi Liquor Company (Halico) to global drinks firm Diageo.

Diageo will pay VOF US$51.6 million for the shares – 67.4 per cent more than the VOF paid to acquire them in December 2006.

Proceeds from the sale will be booked to VOF's net asset value, as calculated in March 2011. Its net value is expected to increase by 4.1 per cent, or 9.8 cents per share, as a result of the transaction.

Andy Ho, managing director of VOF's Investment Manager, said the Halico exit was a clear indication that Viet Nam offered excellent opportunities in the consumer goods sector and other high-growth areas.

"This is our second trade sale in many months, as multinational companies are looking to Viet Nam as their next market for expansion – creating good exit opportunities for private equity investors," Ho said.

Halico's shares, which trade on Viet Nam's over-the-counter market, have performed strongly over the past year. In 2009, Halico earned a net profit of $11.2 million, a year-on-year increase of 35 per cent.

VOF, an investment fund managed by leading asset management group VinaCapital, sold its stake in instant coffee producer Vinacafe in November 2010 for an IRR of 45 per cent over five years.

Ha Noi IZs urged to offer investment incentives

The management board of Ha Noi's industrial parks and export processing zones should create favourable conditions for enterprises and local authorities to promote investment, said Nguyen Huy Tuong, vice chairman of the Ha Noi People's Committee.

In particular, IPs and EZs should build apartment blocks for workers, Tuong said.

Ha Noi's IPs and EZs last year granted licences to 99 projects, totally valued at US$136 million, an 8 per cent rise against 2009, he said.

The revenue of enterprises in IPs and EZs reached $3.6 billion, 12.3 per cent up against 2009, contributing $74 million to the State budget. The total export value hit $2.1 billion, accounting for 26 per cent of the city's total exports.

The total import turnover reached $2.1 billion, up 31 per cent compared to 2009, accounting for over 10 per cent of the total import turnover.

Enterprises in IPs and EZs in the capital created jobs for more than 100,000 additional workers last year. Authorities in the capital have simplified administrative procedures in a bid to attract additional investment.

Bao Minh Insurance pioneers deal for coffee-growers

Bao Minh Insurance Joint Stock Corporation has started agricultural insurance on a trial basis by insuring coffee farmers in Central Highland Dak Lak Province, according to a company official.

If the trial is successful the insurer will expand its agricultural insurance services to all rice and coffee farmers.

The insurer's Index-based Agricultural Business Interruption Insurance Policy is a preparation for the implementation of the Government's coming programme on farming insurance for an experimental period between 2011-13, Bao Minh's Deputy General Director Pham Xuan Phong said.

Under the company's pilot scheme, Dak Lak coffee farmers would be insured for losses and extra costs (business interruption loss) caused by low levels of rainfall in the insured period.

Losses and costs incurred from low levels of rainfall would be calculated against the Cumulative Rainfall Index as measured at the designated rainfall gauging station and published by Central Highlands Regional Hydro-Meteorological Centre of Viet Nam, the insurer said.

Bao Minh has coordinated with the province's Agricultural Promotion Centre to finalise policies with a number of farmers, Phong said.

As around 70 per cent of Viet Nam's population live in rural areas, last year the Ministry of Finance publicised the draft of the Prime Minister's decision on farming insurance as a new step to support agricultural production.

Under the draft decree, poor farming households would receive a subsidy of up to 100 per cent of the insurance premium. The support to other farming households would be 60 per cent. Agricultural production organisations would be supported 50 per cent.

According to the draft, there are three main categories of coverage, including cultivated crop (rice), domestic animals (buffalo, cows, pigs and poultry) and aquaculture (tra and basa catfish, black tiger shrimp and white-leg shrimp).

The insurance sector's earnings from agriculture insurance is insignificant compared to the total non-life insurance figure, according to Phung Dac Loc, secretary general of the Viet Nam Insurance Association. The agricultural premium turnover in 2009 was VND1.7 billion, while total non-life insurance premium turnover was VND13.644 billion.

Agriculture insurance has been slow to develop in Viet Nam because of the small scale of household farming; farmers often can't or won't afford it; and the risks of unexpected natural calamities and epidemic diseases.

Oversupply nips farm produce profits

Oversupply has driven prices of agricultural products at HCM City's wholesale markets down while local speciality prices are going up in the run-up to the traditional Lunar New Year Tet festival.

Representatives from three of the city's major wholesale markets told the city's vice chairwoman, Nguyen Thi Hong, in a working session on Wednesday that there were 20 to 30 per cent more supplies of farm products to the markets than normal.

The supplies were likely to increase by 60-70 per cent as Tet gets closer, they said.

With supply exceeding demand, wholesale market representatives said the prices of vegetable and fruits have fallen by VND500-1,000 ($US0.03-0.05) a kilo, with seafood and aquaculture products dropping by 10 per cent compared to early in December.

The price of wholesale pork cuts stood at VND50,000 ($2.5) a kilo because of the ample supply, although the price of whole-pig meat prices were rising.

City wholesale markets have also seen a sharp decline in the volume and varieties of imported farm produce, particularly those come from China, with Chinese-grown vegetables occupying five to 10 per cent, down 10 per cent from last years' same period.

Exotic fruits of different varieties accounted for 30 per cent of all fruit supplies transported to wholesale markets every night, in which fruits from China represented 10-15 per cent, a reduction of five to 10 per cent from last year.

Other foreign fruits were imported from Australia, New Zealand, the US and Thailand, among others.

Market representatives said prices of vegetables from China were similar to those grown locally but volumes of Chinese agro-products were down because of the flat demand.

At Ben Thanh Market, Tet jams made from coconut, custard-apple, cassava, squash, ginger, lotus seeds and mango are all up 30-50 per cent over last year's corresponding period.

An average price hike of 10 to 30 per cent was also recorded for dried foodstuffs, including squid, beef, fish and shrimp jerky, dried cat's ear, and fragrant mushroom.

Pickled vegetable items that stood at very high prices last year edged up by a further 10 per cent.

For instance, pickled scallion heads are selling for VND110,000-120,000 ($5.5-6) a kilo, pickled onion heads and kim chi for VND50,000 ($2.5) a kilo, and pickled pig ear for VND80,000-100,000 ($4-5) a kilo.

At other markets far from the city centre, although 50-70 per cent cheaper than prices at Ben Thanh market, prices of local Tet specialities remained 25-30 per cent higher than last year's.

Jam prices ranged between VND50,000 and VND70,000 ($2.5-3.5), depending on the variety.

There has been an upsurge in demand for northern specialities from Ha Noi at supermarkets, said the chain director, Nguyen Thanh Hai.

Hai said the price of northern food has risen by 30 per cent over the last week, with some spiking up to 70 per cent above normal.

Prices are continually rising although the supermarket chains have already ordered 50,000 square glutinous rice cakes, 10 to 15 tonnes of glutinous rice, 10 tonnes of lean beef and pork pie, and other varieties of northern delicacies.

Hai said that retail prices would rise on a daily basis from Jan 29 to Feb 2 or the 26th to 30th on the lunar calendar due to twice as expensive prices of raw material and labour, as well as from the usual doubling of air transport fees for Tet.

This year's clement weather has been good for flower growers with many types available at 10 per cent more than last year, said a florist from Cho Lach Market in Mekong Delta Ben Tre Province who was selling flowers on Thanh Thai Street in HCM City's District 10 for the festival.

Prices of polular flowers, such as chrysanthemum or roses ranged from VND70,000-80,000 ($3.5-4) for two small bunches and VND120,000-140,000 ($6-7) for two large ones.

Apricot prices rose by 10-20 per cent, with bonsai apricots rising 25-30 per cent.

Dang Tat Loi, an apricot garden owner in Thu Duc District's Hiep Binh Chanh Ward, said higher apricot prices were attributed to the prolonged cold snaps and fog.

Apricot or peach blossoms and bonsai plants are on sale on Go Vap District's Pham Van Chieu and Le Duc Tho streets, for VND100,000-120,000 ($5-6) a plant.

Hanging potted flowers and plants sell for VND35,000-40,000 ($1.75-2) a pot.

PV