Ministry releases table of new electrical rates

The Ministry of Industry and Trade has raised the price of electricity by VND165 ($0.007) per kilowatt-hour to VND1,242 per Kwh.

Households' monthly electricity bills will be divided into seven levels.

Poor and low-income households who use no more than 50kWh per month will pay VND993 ($0.047) per kWh. However, they must first register with electricity suppliers to benefit from the favourable rate.

Average households will on the other hand have to pay VND1,242 per kWh for the first 100kWh of electricity used, and between VND1,304 – VND1,962 per kWh for the remainder.

The electricity price for temporary or pre-paid users will be VND1,639 (0.08) per kWh, excluding value-added tax.

Household electricity rates in rural and mountainous areas and on islands that are not connected to the national grid will be approved by People's Committees at provincial level. However, under the ministerial decree, rates must be between VND1,863 per kWh and VND3,105 per kWh.

Electricity producers in these areas are required to submit their proposed rates to the industry department and the ministry's electricity regulation department before April 1 each year, before approaching the provincial-level People's Committee for approval (before July 1 each year).

High global demand bodes well for seafood exporters

Viet Nam was in good shape to reach its target of US $5 billion from seafood exports this year, experts said.

Farmers abandon tra breeding due to high costs

The area under tra fish farming in southernmost Ca Mau Province has grown smaller as more farmers face higher input costs.

According to the province's Seafood Association, only 738ha are under tra fish breeding, a reduction of more than 100ha compared to previous years.

This has occurred even though tra fish prices this year increased to VND24,000-VND25,000 per kilo compared to VND16,800 in the same period last year, the association said.

Le Hong Duc, chairman of the Seafood Association of Chau Thanh District, said the area for tra fish breeding in his district had fallen by 40 per cent this year.

Many farmers had abandoned breeding because they feared unstable prices and outlets.

Feed prices had risen more than 40 per cent, and the price of baby fish had also gone up, creating more pressure on farmers, he said.

As a result, there would be a severe shortage of tra fish materials this year, said Nguyen Trang Su, deputy chairman of the People's Committee of Hong Ngu District.

He called on the Government to adopt appropriate policies to ensure stable outlets for fish as well as more favourable conditions for farmers to obtain bank loans.

They said demand on the world market would continue to increase and international supply was likely to decrease.

The experts expected tuna exports to increase in value to $300 million this year. Meanwhile, exports are likely to surge to $115 million for crab and to $490 million for mollusc.

"This year, besides diversifying products, local seafood producers and exporters should focus on improving the quality of their products and developing trademarks," said Nguyen Minh Tam, an official at the Viet Nam Association of Seafood Exporters and Producers.

The ministry said the sector should make adequate investments in qualified and hygienic breeding to ensure sufficient supply and to further develop key products such as shrimp, tra and tuna.

Adequate overseas trade promotions, effective market predictions and closer links among domestic seafood processors should also be enhanced, said the ministry.

Viet Nam's seafood exports ranked sixth among the world's 10 leading seafood exporters and fifth in Asia behind mailand China, India, Indonesia and the Philippines.

Seafood exports increased by 54.4 per cent year on year during the first two months of 2011, said the Ministry of Agriculture and Rural Development's Seafood Department.

In February, the export value of seafood reached $400 million, $75 million higher than figures from the previous month, the department said.

Last year, the country's seafood export values reached $4.94 billion, an increase of 16.3 per cent on the previous year. The increase has likely been caused by the Government's policies that support fishermen and encourage them to use modern processing and preservation technology.

Last year, tuna sales increased by 48.9 per cent in volume and 59.9 per cent in value to 83,800 tonnes and $293 million, respectively. The commodity was exported to 91 markets in the world.

Vinamilk ties knot with three European partners

Dairy giant Vinamilk yesterday signed agreements for nutritional research and application with three European firms in Zurich, Switzerland.

The three, DSM and Lonza of Switzerland and Chr. Hansen of Denmark, specialise in research, development and application of micro-nutrition and bio-science.

Vinamilk has been working with them for liquid milk, spoon yoghurt products, and, especially, its Dielac baby formula.

The company said official signing would take the co-operation a step further, especially in key areas like exchanging market information, new products research and development, clinical evaluation of product efficiency and support in development of lab for food safety control. They also planned to work together in training.

In 2009, Vinamilk and the Viet Nam National Institute of Nutrition did a study on the nutritional situation of Vietnamese children in different age groups focusing on nutritional features, daily rations, and the deficiency of micro-nutrition.

Armed with this knowledge, Vinamilk has since strategically developed products appropriate for Vietnamese children's needs and development.

"Our strategy for the next three years is to continuously enhance the research on the nutritional situation, especially of Vietnamese children," Nguyen Quoc Khanh, Vinamilk's director of research, development, and production, said at the signing ceremony.

"Moreover, our strategic co-operation with world- leading partners will significantly support us in applying the most advanced nutritional science."

The 2009 study, done in 63 cities and provinces of more than 50,000 children aged between 2 and 5, found almost half of them were malnourished to different levels.

Vinamilk is set to introduce Dielac Pedia, a tailor-made food for inappetent kids, developed in co-operation with its partners.

It focuses on factors that cause the lack of appetite in kids, including a weak digestive system and absorption ability.

Lonza is a supplier to the pharmaceutical, healthcare and life-science industry. Chr. Hansen is a bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries, while DSM is a health and nutritional-ingredient solutions provider.

Paper industry expands capacity

The nation's paper industry rapidly expanded capacity during 2010, adding eight major new production facilities with a total capacity of 430,000 tonnes per year.

Tan Mai Joint Stock Co, meanwhile, built four new paper mills in the central and southern provinces of Quang Ngai, Lam Dong, Kon Tum and Dong Nai with a total cost of VND6 trillion (US$285 million).

A VND3.35 trillion ($159 million) packaging plant was opened by the Vina Kraft Paper Co in the southern province of Binh Duong, while the Sai Gon Paper Co invested around VND2 trillion ($95.2 million) in its My Xuan 2 plant in the southern province of Ba Ria-Vung Tau.

Bai Bang Paper, meanwhile, opened a VND520 billion ($24.7 million) mill during 2010 to produce newsprint, while Diana Joint Stock Co invested roughly $20 million in launching a tissue paper plant on a 10ha site in the northern province of Bac Ninh.

Sizeable investment in the past year is a good sign for the industry, reflecting a growth rate expected to reach 11 per cent this year and reducing import, said Viet Nam Pulp and Paper Association general secretary Vu Ngoc Bao.

However, paper producers continued to barely break even or even operate at losses, Bao said. Manufacturing costs rose by 30 per cent last year, he noted, while producers increased product prices by only 14-20 per cent.

Paper import duties have been reduced by 20 per cent since September 2008, he said, and Viet Nam has opened the door to foreign competitors from the US, China and Japan, increasing competition for domestic producers.

Sai Gon Paper general director Cao Tien Vi said his company's gross revenues reached VND750 billion ($35.7 million) in 2010, but losses still mounted to VND20 billion ($952,000) due to the upheaval in foreign exchange rates and the rising costs of skilled human resources.

Trai Dat Xanh Construction and Environment Services Ltd Co deputy director Nguyen Bach Nhu Lan also noted that paper production was a significant source of water pollution, with both major producers and smaller firms often using outdated equipment with high waste generation. Mills needed an average of 30-100 cubic metres of water for one tonne of paper produced, polluting nearby rivers and canals, Lan said.

Banks ordered to prioritise lending for industry, farms

Commercial banks will be forced to double compulsory reserves if they fail to reduce the proportion of outstanding loans made to the non – manufacturing sector to 22 per cent by June and 16 per cent by the end of the year, the State Bank of Viet Nam ordered yesterday.

The measure would prioritise lending for manufacturing, agricultural production, rural development, small – and medium-sized enterprises, support industries and exporters, while effectively limiting new consumer loans or lending for real estate or securities investment.

The State Bank yesterday also reminded commercial banks to target overall credit growth of less than 20 per cent this year, requiring any banks unable to meet such a target to report to the central bank for evaluation of the need for a higher target.

Last year, credit growth reached 27.65 per cent, overshooting a target of 25 per cent and pushing outstanding loans to 140 per cent of gross domestic product. Credit growth rose in the first two months of this year about 3.4 per cent from the end of 2010.

State Bank of Viet Nam Governor Nguyen Van Giau estimated that tighter monetary policies – targeting a growth in the M2 money supply of only 15-16 per cent this year rather than an earlier estimate of 21-24 per cent – would remove an additional VND50 trillion ($2.27 billion) from circulation and help the Government in its current battle against inflation.

Inflation reached 12.24 per cent year-on-year in February, the briskest pace in two years.

"All monetary measures at this time will focus on fighting inflation first," Giau told reporters in Ha Noi yesterday.

The State Bank has also ordered commercial banks to strengthen internal auditing, add to their risk provision funds, monitor bad debt ratios, and avoid making loan swaps to cover bad debts.

Other measures the Government has ordered to reduce the growth in the money supply and ease inflationary pressures include stabilisation of the foreign exchange and gold markets and a reduction in dollarisation of the economy by restricting the quotation of prices and trading goods in US dollars.

Giau yesterday confirmed that the central bank was drafting a decree that would ban retail trade in gold bars, estimating that hundreds of tonnes of gold was now held in private hands, putting pressure on the foreign exchange market.

A shutdown in the trade in gold bars would be done in reasonable stages to minimise negative impacts on the economy and ensure the interests of the public, he said.

"People will still be able to hold gold jewelry and processed gold products," Giau added.

Agricultural exports rise 50%

Exports of agro-forestry and seafood products in February are estimated to reach US$1.5 billion, taking the total export revenue in the first two months to $3.6 billion, up 50.7 per cent over the same period last year, according to the Ministry of Agriculture and Rural Development.

All agro-forestry and seafood products have increased in export value because of high export prices, with exports of seafood products increasing by 54.4 per cent to $835 million; wood and wooden products by 17.6 per cent to $548 million; and agricultural products by 57.5 per cent to $2billion.

Of agricultural products, coffee exports have reached 225,000 tonnes worth $438 million in the first two months of the year, up only 2.2 per cent in volume but 40.4 per cent in value against the same period last year.

The average export price of coffee has increased to $1,948 a tonne in the two month period, an increase of 38.5 per cent against the same period last year.

The average export price of pepper in the two months also rose to a record high of $4,905 a tonne, with export of pepper reaching 11,000 tonnes worth $53 million, down 22.6 per cent in volume but up 23.4 per cent in value.

Rice exports have reached 1.1 million tonnes worth $592 million in the two months, up 55.6 per cent in volume and 44.5 per cent in value against the same period last year. The average export price of rice has reduced by 3.2 per cent against the same period last year.

Meanwhile, imports of agricultural materials and agro-forestry and seafood products have reached nearly $2.3 billion in the two months, an increase of 20.3 per cent year-on-year

Firm to disclose dollar reserves

Commercial banks have been ordered by the State Bank of Viet Nam to report on the foreign currency deposits of 99 major State-owned enterprises by the end of this week.

Late last week, Prime Minister Nguyen Tan Dung required major State-owned companies to sell all their foreign currency to banks, and banks would have to sell their dollars at the official exchange rate when needed.

This is seen as an aggressive move to boost the value of the dong and the supply of dollars in circulation in the economy.

Large State-owned groups and corporation are major dollars holders and their foreign currency accumulation has been seen as a major factor in recent dollar shortages.

"Once they are required to sell dollars back to commercial banks, the supply of foreign currency on the market would be increased significantly and forex would not be as knotty," said director of the capital business division of the Bank for Investment and Development of Viet Nam Nguyen Manh.

A document issued to commercial banks ordered the banks to report foreign currency on deposit by a list of 21 State-owned groups and 78 corporations which together sell about US$5-6 billion to commercial banks annually.

The State Bank's order recalls the situation on the foreign exchange market in December 2009, when the Government required seven national groups and corporations to sell US dollars to commercial banks to slow the rapid appreciation of the dollar against the dong. At that time, the dollar deposits of these major State-owned enterprises totalled $1.2 billion.

The dollar shortage has extended the gap between official and black market exchange rates, requiring companies to pay more on the black market for the US dollars they need to import. On the black market yesterday, the dollar fell by about VND100 from Sunday's rates to VND21,880-21,950.

Work to begin on thermal plant

PetroVietnam Power Co (PV Power) signed a contract worth US$1.2 billion with PetroVietnam Construction Joint Stock Co (PVC) in Ha Noi yesterday to build the Thai Binh 2 coal-fired thermal power plant. Work is expected to begin today.

Under the contract, PVC would provide engineering, procurement and construction for the PV Power's 1,200-megawatt plant in the northern province of Thai Binh's Thai Thuy District. The plant has a total investment capital of over $1.6 billion.

The 43-ha plant is the second for the Thai Binh Power Centre. It will have two turbines, estimated to provide 7.8 billion kWh to the national grid annually once operational in 2014.

The centre's first plant, Thai Binh Thermo-Electric Plant 1, is also scheduled to open its doors in 2013. Financed by the Electricity of Viet Nam (EVN), the plant has a designed capacity of 600MW.

The Thai Binh Power Centre has been allocated $2.1 billion, partly from investors PetroVietnam and EVN.

The facility would aid the socio-economic development of the province and the surrounding areas, said Nguyen Hanh Phuc, chairman of the Thai Binh Province People's Committee.

It would help restructure our economy with a greater focus on industry, he said, adding that it would meet the power demands for Thai Binh and neighbouring provinces, ending the current shortage of electricity in the area.