New office to promote trade with Tuscany

An office to promote trade and investment between Viet Nam and Italy is set to open in central Italy's Tuscany region.

Viet Nam's Ambassador to Italy Nguyen Hoang Long and Stefano Giovannelli, General Director of Tuscany Economic Promotion Agency (TEPA), yesterday signed a memorandum of understanding on the establishment of the office.

The office aims to play an important role in exchanging information on trade and investment between Viet Nam and the Tuscany region. Vietnamese or Italian business people who want to find out about business opportunities and policies in each other's countries can seek help from the office.

The office is scheduled to open next month and be managed by a Vietnamese officer.

Speaking at the singing ceremony, Ambassador Long said he hoped the office would operate efficiently and act as a bridge for bilateral economic co-operation.

A Viet Nam Week featuring Vietnamese culture, arts and music will be held in Tuscany next February. This is one of the first events for the Viet Nam Year in Italy campaign, which will be held to celebrate the 40th anniversary of diplomatic ties next year.

Attending the ceremony, Tuscany President Enrico Rossi said he wanted the relationship between the region and Viet Nam to develop comprehensively in the coming time. He also expressed his support for Viet Nam Week in the region.

Highlighting Piaggio's successful performance in Viet Nam, Rossi said he hoped the company would be an example for other Italian enterprises to do business in Viet Nam.

With an area of about 23,000sq.km and home to 3.75 million inhabitants, Tuscany is known for its gorgeous landscapes and rich artistic legacy. Tuscany and its capital Florence is a popular tourist destination, attracting millions of tourists every year.

 Sugar imports to reach 70,000 tonnes

Vietnamese companies will be allowed to import 70,000 tonnes of sugar this year despite sufficient supply in the domestic market in order to keep up with WTO commitments.

The quota has been decided by the Ministry of Agriculture Rural Development and the Ministry of Industry and Trade after studying the yield of the 2011-12 crop and current inventory volumes, said Nguyen Bai Duong, an agriculture ministry official.

Duong told Viet Nam News that the quota confirmed the ministry's prediction at the beginning of the year.

"We have submitted to the PM the criteria applied as well as the list of companies wanting to import sugar to serve their production," Duong said.

He reaffirmed that the country was not facing a sugar shortage.

The general secretary of the Viet Nam Sugar and Sugarcane Association, Nguyen Hai, echoed Duong, saying domestic sugar plants could "absolutely meet the demand from companies".

"The country produced nearly 1.4 million tonnes of sugar in the 2011-12 crop and the inventory volume as of July 31 was 230,000 tonnes.

Meanwhile, we estimate consumption this year at between 1.3 million and 1.4 million tonnes," Hai told Viet Nam News.

Furthermore, he added, the new crop would start from the beginning of this September, reducing the chances further of any sugar shortage."

"The import quota of 70,000 tonnes is on par with the country's commitment with the World Trade Organisation," he said.

Hai also revealed that domestic sugar consumption in current months has slowed down to about 60,000 tonnes of sugar each month compared to the normal 110,000 tonnes. He attributed the slow consumption to illegal imports.

"Illegal imports have become uncontrollable," he said, explaining that companies that are allowed to import sugar were either re-exporting it or selling it in the domestic market instead of sing it for production.

"Meanwhile, domestically-produced sugar is less competitive because of high prices."

To solve the problem, the association has called on the Government to scrap its system of setting individual sugar import quotas for companies.

"Once the Government has decided the export quota, they should invite bids from companies," Hai said.

 Banks issue more bonds

Many banks are vying with one another to issue debt instruments as interest rates have fallen, according to independent market watchdogs.

Bonds and certificates of deposits (CDs) are the most commonly issued debt instruments, which also include bills, notes and commercial papers.

The HCM City Development Commercial Joint Stock Bank (HDBank), for example, issued on July 24 short-term certificates of deposits in Vietnamese dong and the US dollar with a total issuance face value of more than VND5.4 trillion and $20 million for economic organisations and credit institutions.

The bank's CDs have a minimum face value of five million dong or US$100, with an attractive coupon rate and bonus incentives.

Short-term CDs allow customers to make pre-mature withdrawals at any transaction office belonging to HDBank.

In addition, customers do not receive principal and interest when due. The interest is included in the principal, and HDBank will switch to term-savings with the interest received at the end of term.

According to its announcement notice sent to customers, Maritime Bank also plans to issue CDs in dong with a combined face value of VND2 trillion ($95.2 million).

The bank's two-year-term CDs have a total face value of VND1 billion ($48,000), with both fixed and floating interest rates.

Although the Joint Stock Commercial Bank for Investment Development of Viet Nam (BIDV) is planning to sell international bonds of a total value of VND10 trillion ($476 million), it is still selling nearly VND1 trillion worth of bonds to domestic investors. This kind of bond has a floating interest rate and term between two and three years.

Also, PetroVietnam Financial Corporation plans to mobilise VND8 trillion ($380 million) from the issuance of debt instruments.

Of that amount, VND5 trillion ($238 million) is expected to be raised from the issuance of CDs and VND3 trillion ($142.8 million) from convertible bonds.

Market analysts said that many organisations and credit institutions have been interested in bonds and CDs as a way of generating long – and medium-term capital.

Many credit institutions are in great need of long – and medium-term capital to prepare for credit activities that are expected to increase at the year-end.

A leader of a major State-run bank, who declined to be named, said that the fixed-income money market (also called the debt-instrument market) was competitive since many commercial banks want to issue debt instruments.

The bank official said the issuance of debt instruments comes at a favourable time. The deposit interest rate has fallen, while the interest rate of debt instruments has also been cut significantly (the rate of enterprise bonds were slashed from 18 and 19 per cent per year to 12 and 13 per cent).

Additionally, a recently issued policy of the central bank that aims to lift the ceiling deposit interest rate of long – and medium-term deposits has also encouraged credit institutions to participate in the enterprise bond market since the competitiveness of bonds among enterprises has improved.

A foreign senior economic expert also said that the cutting of interest rates had prompted commercial banks to issue more bonds and CDs to generate capital.

However, many investors are still worried about risks and liquidity that may arise from buying bonds and CDs.

 Footwear exports to Brazil keep soaring

Viet Nam exported over US$121 million worth of footwear products to Brazil in the first six months of this year, up 55 per cent from the same period last year.

This is an impressive increase for the sector, considering the global financial crisis has had an adverse effect on consumer demand and the quantities of goods imported by many countries.

According to economic experts, the extent that Vietnamese footwear has penetrated the Brazilian market will create an opportunity for Vietnamese exporters to expand their operations in other markets in the South American region.

 VN products fair for Cambodia

The Vietnamese High-Quality Goods Fair will take place in Cambodia from 23 to 27 August, according to the Ministry of Industry and Trade.

The fair is expected to attract more than 150 enterprises who will showcase various commodities such as household appliances, food, textiles and garments, construction materials, pharmaceuticals and production tools in 250 booths.

 Firms bypass bourse to find private buyers for shares

With the stock market in the doldrums, private placement of shares is becoming an increasingly encouraging option for strategic partners to invest in public companies, said Military Bank Securities Co deputy director Quach Manh Hao.

Existing small shareholders are generally uninterested in additional share issues, since many listed shares were already trading on the market at below their face value, said Bao Viet Securities Co analyst Tao Minh Duong.

"Therefore, many companies look for strategic partners when they are seeking long-term funding," Duong said.

However, there are a number of regulations that can make private placement less attractive, including a limitation that shares so acquired cannot be transferred for one year. Different placements must also be separated by at least six months.

"However, the problems of private placement do not lie in legal regulations but whether enterprises and their business plans can attract investors," Duong said.

Earlier in May, food processor Masan Group (MSN) announced a plan to issue up to 310 million shares by April of next year. While the sale of 200 million new shares would be used to settle the company's debts, the remaining 110 million shares would be issued to raise new capital and complete acquisitions.

Sacombank Securities Co (SBS) has also planned to issue at least 10 million shares through private placement to strategic partners. Other companies seeking to increase capital through private placement include feed producer Viet Thang (VTF) and construction companies Unicons and Vinas A Luoi Mineral Co (ALV).

 World Bank funds urban upgrading

The World Bank will provide US$293 million in official development assistance for a $399 million project to upgrade six urban areas in the Cuu Long (Mekong) Delta region.

The project, expected to be completed by December 2017, targets the six cities of Can Tho, My Tho, Cao Lanh, Ca Mau, Tra Vinh and Rach Gia.

It will upgrade infrastructure and build resettlement areas for those affected by the work.

A total of 25,900 households will be connected to the water supply system. Another 18,900 will be linked to the sewerage system and 139,500 people connected to upgraded roads.

The project is part of a national urban upgrading programme ratified by the Prime Minister Nguyen Tan Dung, which aims to upgrade 100 urban areas nationwide between 2009 and 2020.

Since 2007, about 2.2 million people in HCM City and Can Tho City in the south, and Hai Phong City and Nam Dinh Province in the north, have benefited from urban upgrades.

 Importers again lift fuel prices
 
Petroleum importers yesterday raised retail fuel prices by an average of VND400-900 (US$0.019-0.043) per litre.

Petrolimex, the nation's leading fuel distributor, announced prices of VND22,400 per litre for RON 95 and 21,900 for RON 92. Diesel was set at VND20,800 per litre and kerosene at VND20,650 per litre, while mazut increased to VND18,450. The Sai Gon Petroleum Co Ltd also announced a similar price hike, with petrol products and kerosene prices rising by VND400.

The companies' decision followed approval from the Ministry of Finance, granted after global oil prices had increased for over 11 consecutive days.

Under current regulations of the ministries of Industry and Trade, and Finance aimed at avoiding runaway fuel prices, price adjustments must also be at least 10 days apart, and no single increase can exceed 7 per cent.

Importers were eligible to adjust prices according to market fluctuations, but the State still controlled prices to make sure that these fluctuations did not strongly affect consumers, said the director of the Ministry of Finance's price management department, Nguyen Tien Thoa.

If prices continued to rise, the two ministries could consider measures to control prices and taxes or allow payments from the fuel price stabilisation fund.

Meanwhile, cooking gas distributors yesterday also raised prices by VND52,000 (US$2.50) to an average of VND367,000 ($18) per 12kg canister.

Distributors rasing prices included Sai Gon Petroleum, MT Gas and Pacific Petro, among others.

After a period of falling prices, imported gas has risen to $775 per tonne, $177.50 higher than in early July.

According to the HCM City market watch team, gas prices were prone to fluctuations, but pricing violations were also widespread, so the team intended to tighten inspections in the near future. In July, the team inspected 22 gas shops and agents, and 14 were found to have violated regulations by illegally extracting gas from cannisters and falsifying weights.

 Banks salvage debt-ridden seafood firm

Debt-ridden Binh An Seafood JSC (Bianfishco) has been rescued after signing a co-operative agreement with two banks on Sunday to restructure the company.

Bianfishco had signed agreements with Saigon-Hanoi Commercial Joint Stock Bank (SHB) and the Viet Nam Development Bank (VDB) to stabilise production and ensure the rights of workers, farmers and other shareholders, according to Tran Van Tri, general director of Bianfishco.

Under the agreement, SHB will guarantee payment of Bianfishco's loans from VDB. VDB has also committed to releasing Bianfishco's mortgaged property of which 50 per cent is owned by CEO Pham Thi Dieu Hien.

The agreement stipulates that SHB is recognised by the Can Tho Planning and Investment Department as taking control of a 50 per cent stake in Bianfishco from Hien.

Last month, SHB asked Can Tho City People's Committee to purchase debts and deal with financial issues and the restructuring progress of Bianfishco. In documents sent to the committee, SHB said it wanted to organise the entire restructuring of Bianfishco, including financial arrangements.

Bianfishco has also pledged to co-ordinate with the two banks to fulfil administrative procedures for SHB to be recognised as its major shareholder with a 50 per cent stake.

Bianfishco was established in 2007 and operated strongly until the middle of last year until banks refused to extend its financing arrangements.

Price of summer-autumn rice crop still fluctuating

Since the Vietnam Food Association began stockpiling rice, about 20 days ago, prices for the summer-autumn rice crop have not risen but instead fallen in several places in the Mekong Delta.

Le Thanh Phan, a farmer from Phuong Binh Commune of Phung Hiep District in Hau Giang Province, said that ten day ago traders paid VND4,200 a kilogram on direct purchase from the rice fields.

However traders have now squeezed the price to VND3,700 due to rainy weather. Similar conditions prevail in other districts in the province.

According to the Ministry of Agriculture and Rural Development, the cost to produce a kilogram of rice is VND3,993. Therefore the rice price should be VND5,190 a kilogram to ensure at least 30 percent profit for farmers.

Vietnam Food Association said that dried rice price was fluctuating from VND5,100-5,200 a kilogram last week.

However, most businesses under the association have not bought rice from farmers but from traders, hence prices announced by the Vietnam Food Association will always be higher than what traders pay farmers.

 Increase in aqua-products in Vietnam

In the first seven months of the year, output of aqua-products was 1,425,000 tons, a 6.8 per cent increase over the same period last year, with July alone showing an increase of 217,000 tons.

The Ministry of Agriculture and Rural Development said that fishermen are happy as they continue to rake profits despite four storms since the beginning of the year.

Although this is not the tuna season, the volume of fish is still quite high. Fishermen in the central province of Binh Dinh catch 5,635 tons of tuna, while their counterparts in the central provinces of Phu Yen catch 6,000 tons and Khanh Hoa only 1,000. In Tuy Hoa City in the central province of Phu Yen, there are 200 boats specializing in catching oceanic tuna.

According to the ministry, in July alone, breeders harvested 315,000 tons of aqua-products from breeding cages in the sea, pushing up the total output in first seven months of the year to 1,653,000 tons, a year-on-year increase of 5.8 percent.

Of this amount, breeders harvested around 635,400 tons of pangasius over a six hectare area.

Fortunately, after a drastic plunge of around VND18,000-19,000 per kilogram in mid July, raw pangasius surged to VND22,000-22,500 per kilogram. This is a positive sign indicating the recovery of pangasius market.

Increase in fish prices is good news for both farmers and processing units. With higher fish prices, farmers can sustain losses while processing units can be assured of enough raw stock for processing and exporting.

In Dong Thap and Vinh Long Provinces and Can Tho City, farms are again flourishing after several business enterprises receive bail out packages from the government.

 Gas prices surge, fuel prices to follow suit

Cooking gas retail prices will pick up by more than VND50,000 per 12-kilo container on Wednesday after four months of constant price drops, while fuel wholesalers have proposed a price hike.

According to cooking gas wholesalers, Saudi Arabian Oil Company (Saudi Aramco) as one of the world’s key gas suppliers has quoted the August contract price at US$775 per ton, up US$177.5 against July.

Therefore, local retail prices are raised by an average VND4,333 each kilo. Accordingly, a 12-kilo container of cooking gas mark up VND52,000 to VND367,000-370,000 on Wednesday.

Le Thi Minh Man, deputy general director of Saigon Petro, known for SP Gas, said the contract price had risen too sharply this month although it was not winter yet. “Petrol and gas prices now go up and down without any rule as there are many influential factors,” said she.

Given the price spike, gas consumption in August might be affected, said representatives of many wholesalers.

The fact that cooking gas prices would shoot up in August was foreseen in early July. As such, sales agents scaled up their stockpiles to enjoy the price differences.

In late July, wholesalers restricted the gas volumes allocated to sale agents and raised wholesale prices by VND10,000 per container, while retail prices remained unchanged.

In related news, fuel wholesalers have sent their petition to the Ministry of Finance, seeking a fuel price hike of VND500-900 per liter. So far, the ministry has yet to give its reply.

Another price increase in the local fuel market is inevitable, as the finance ministry in late June permitted wholesalers to determine prices in accordance with the margin and the frequency regulated in the Government’s Decree 84 on fuel trading.

This allows enterprises to revise prices when the basic prices pick up less than 7% and the minimum time between two adjustments is ten days. However, every price cut and hike must be registered with the finance ministry.

The finance ministry has constantly stated it would maintain its control even when the right to determine prices was transferred to wholesalers.

Enterprises must calculate prices based on the method and the principles formed by the State. The State will directly intervene when there is strong volatility.

Regarding the latest price hike on July 20, the finance ministry said enterprises had registered an increase level of VND500-600 per liter. However, the ministry pinpointed the gap between the base prices and the current prices was some VND400 a liter at most, so this figure was the final increase level.

 Tea export price stays low

Vietnam ranks fifth in tea production and export but its tea export price stays at the lowest compared to other exporting countries, experts said at a conference on tea development in Hanoi on Tuesday.

Professor Nguyen Duy Thinh from Hanoi University of Science and Technology said Vietnam had a total tea farming area of 126,000 to 133,000 hectares with around two million people working in the sector. However, the tea export value is low, at only US$1,164 a ton last year compared to US$4,073 in Sri Lanka, US$2,864 in India and even US$10,134 in European countries.

According to Thinh, such a low price may result from the overuse of insecticides by farmers and the failure of processing firms to meet food safety and hygiene requirements.

“It is the low quality of products that makes Vietnam a country having the highest volume of tea export returned by U.S. customers,” he said.

Currently, Vietnam’s tea has yet to have a brand name, and foreign partners mainly buy tea from Vietnam to mix with their tea.

Doan Anh Tuan, chairman of the Vietnam Tea Association, said the haphazard licensing of tea processing plants has resulted in unnecessary overlap in material cultivation areas.

According to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, the competition within the tea industry is very intense with over 450 processing plants able to process nearly 1.5 million tons of fresh tea buds a year. However, they can actually process 600,000 tons a year, or 40% of their capacity, due to a shortage of raw tea.

 Summer air tickets to U.S. almost sold out

TIt is currently difficult to buy air tickets to fly from Vietnam to the U.S. this summer, with tickets of many carriers being sold out and the airfare being US$500-600 higher than the normal level.

Most passengers wanting to fly to the U.S. this month have failed to buy tickets over the past days as it is now the peak time of this year’s summer travel season on this air route.

According to some ticketing agents in HCMC, summer is the peak travel time as there are a large number of overseas students and Vietnamese flying back to Vietnam in the summer and return to the U.S. in mid-August to prepare for the new school year.

Currently, many ticketing agents charge US$1,300 for a one-way ticket and US$2,100 for a return ticket for flights from HCMC to Houston departing in the middle of this month. However, tickets are even scarcer on the route from HCMC to Los Angeles, where there is a large community of Vietnamese.

As a customer wanting to buy a ticket to the U.S., the Daily has contacted several agents and only been able to find tickets of United Airlines priced at US$1,014 departing after August 22.

Nguyen The Khai, director of Hoan My Tourism Co., said that the U.S. ticket demand was staying high, with the airfare increasing by US$500-600.

According to Khai, if wishing to buy tickets to the U.S., customers need to have at least US$2,000, but buying tickets at this time is not easy at all. Among air carriers operating flights to the U.S., EVA Airways seems to sell out its tickets the soonest due to its low price.

“The demand for air tickets to the U.S. is normally high in summer, but it is even higher this summer. We send four to five groups to the U.S. a month, with 40-50 people in each group, but due to a shortage of tickets, we have had to reduce the number of customers in a group to 15-20,” Khai said.

Khai advised customers to wait until next month to enjoy lower prices and more ticket options. “The airfare will decline sharply after September 2,” he said.

 OCB, C.T Group sign cooperation deal

Orient Commercial Bank, or OCB, and C.T Group on Tuesday struck a cooperation agreement under which OCB will provide financial support for the enterprise while receiving assistance to develop its retail services.

Under the agreement, the bank will become one of the main lenders to give solutions and services for C.T Group. OCB will prioritize provision of short, medium and long-term credits for the enterprise through its lending programs for various sectors such as retail, real estate and logistics.

Meanwhile, C.T Group pledges to place OCB’s ATM booths at strategic locations in HCMC and points of sale at all retail points of the group. The enterprise will also assist OCB in issuing credit cards for 400,000 VIP clients of its retail network.

OCB is in a strategic cooperation deal with CT Song Than Joint Stock Company, a subsidiary of C.T Group, as well.

Greater lanes for trade with China

The road is open for more trade with China. An Agreement and Protocol on Freight and Passenger Transport between Vietnam and China is to kick into gear this month.

In light of the Agreement and Protocol on Freight and Passenger Transport between Vietnam and China, motorised vehicles of the two countries will be eligible to run on 17 routes near the Vietnam-Sino border and 9 routes deep in the mainland in each other country.

Each country will have 500 car units licensed to go deep in each country’s territory following the coequal principle in each route. Motorised vehicles will face no limitations when crossing two border provinces.

In the near term, the ministries of Transport in both countries will host traffic opening ceremonies to three routes going deep in each country mainland.

Particularly, on August 16 a traffic opening ceremony to a freight transport route running from Kunming in China crossing Hekou/Lao Cai border gates to Haiphong and Hanoi will take place in Kunming city.

Four days later, the Vietnamese side will host traffic opening ceremonies to two freight transport routes from Hanoi crossing Huu Nghi/Huu Nghi Quan (China) border gates to Nanning and Shenzhen cities in China.

“Delivery of goods between the two countries will be much faster and cheaper with the opening of these international through traffic lines,” said Directorate for Roads of Vietnam’s Transport Legislation Department deputy head Phan Thi Thu Hien.

Vietnam Automobile Transport Association (VATA) chairman Nguyen Manh Hung assumed freight transport would be more vibrant than passenger transport.

VATA’s recent surveys in two Yunnan and Guangxi provinces showed that Guangxi province had many big transport enterprises each having several thousand modern vehicles for long-haul transport whereas big local peers owning above 200 big trucks remain modest in number. Most of local transport firms are small in size with little experience in international transactions.

Besides, bearing high borrowing costs plus import duty, transport fares in Vietnam are dearer than those of China’s, whereas local firms have poor experiences in international logistic services.

In this context chairman Nguyen Manh Hung said VATA would convene urgent meetings with freight transport associations in major goods transport locations Hanoi, Da Nang and Ho Chi Minh City sourcing remedies to scale up cooperation among transport firms.

“It is time for [transport] firms to team up to boost strength instead of leading spontaneous and patchy development as well as unhealthy market competition as seen in the past years,” said Hanoi Transport Association chairman Bui Danh Lien.

Manufacturing conditions worsen for July

Vietnam’s Manufacturing PMI has fallen to its lowest level since the survey began in April, 2011.

July’s data was highlighted by a fall in the seasonally adjusted HSBC Vietnam Manufacturing (PMI) to 43.6, from 46.6 in June with overall business conditions

Accordingly, manufacturers in Vietnam indicated a marked reduction in production levels during July, thereby extending the current period of contraction to four months.

Latest data indicated that both output and new business levels declined at the fastest rates since the survey began in April, 2011.

Anecdotal evidence widely pointed to unfavourable economic conditions and an unwillingness to spend.

The overall drop in new business volumes was mainly driven by weaker demand from domestic clients, as new export orders continued to decline at only a modest pace.

Companies reporting a fall in new work received from abroad generally cited lower exports to China and softer demand from European markets.

Lower workloads allowed firms to focus on reducing their volumes of unfinished business in July. As a result, latest data pointed to a marked fall in backlogs of work, with the pace of decline the fastest in the 16-month survey history.

Meanwhile, Vietnam manufacturers trimmed their staffing levels, thereby extending the current period of workforce reduction to two months.

Survey respondents widely attributed the fall to reduced inflows of new work and an associated decrease in production requirements at their plants.

Vietnamese manufacturers cut back on their input buying for the fourth successive month in July. The latest reduction in purchasing activity was the sharpest since the survey began in April 2011, which in turn resulted in a marked fall in pre-production inventories.

Lower demand for inputs contributed to another improvement in supplier delivery times during the latest survey period.

LG brings valuable insights on sustainable building practices

LG Electronics (LG) today demonstrated its ongoing commitment to sustainability through a showcase of its cutting-edge energy solutions for the green building sector.

“We’re pleased to introduce this comprehensive suite of energy-efficient HVAC products and solutions to our clients and industry partners in the Southeast Asia region,” said LG System Air Conditioning Business Unit president Kam-gyu Lee.

“The advanced technologies we have incorporated provide some of the best energy efficiency returns in the market.”

The LG Global HVAC Conference offered insightful discussions about developing structures that place a minimal burden on the environment.

LG executives outlined how strong research and development, leading-edge energy efficient technologies and LEED certification helped propel LG to become a thought leader in promoting sustainable building practices in infrastructure-hungry South East Asia.

Highlighting the event was LG’s latest HVAC and Energy Solution portfolio, led by the eco-friendly LG Multi V III air conditioning unit.

Boasting three key benefits - higher energy efficiency, larger capacity and longer piping design - the Multi V III is the company’s most advanced and energy efficient solution to address all the major HVAC requirements.

LG ARTCOOL Platinum air-conditioner, another highlight in the exhibition, featured the world’s first mirror-finish design and the lowest noise level in the industry while delivering up to 60 per cent energy savings.

The LG Global HVAC Conference was a valuable opportunity for guests to interact with prominent officials from the Singaporean government and high ranking members of the American Society of Heating, Refrigerating and Air Conditioning Engineers.

Keynote speakers for the conference included executive director of Singapore Green Building Council Tan Tian Chong and Professor Chou Siaw Kiang of the National University of Singapore, who shared their insights with over 300 delegates.

“Singapore is highly energy-conscious when it comes to architecture and design as well as building and construction,” said managing director of LG Electronics Singapore Scott Jung.
“Our comprehensive line-up of HVAC and energy solution products enables us to address the demands of this rapidly growing market and provides customers with the best-of-breed eco-friendly solutions that will grow with them as they grow.”

LG Electronics, Inc. is a global leader and technology innovator in consumer electronics, mobile communications and home appliances.

Cheap local lobster floods market  

On many streets in HCMC such as Nguyen Van Linh, Nguyen Huu Tho, Tran Xuan Soan or Vo Thi Sau, lobsters are being offered at cheap prices for large amounts.

A regular trader said small lobsters are being sold for only VND125,000 (USD6) per kilo, while large lobsters between 1.5-2.5kg, are around VND350,000 (USD17) per kilo. "These lobsters are brought from Nha Trang. Each day I sell at least ten kilogrammes."

Even though most of the lobsters, transported from Nha Trang to HCM City, are not live, they don't have any bad smell.

Le Cong D., owner of a restaurant, suspects that preservatives are being used to inhibit the growth of bacteria. "Lobsters usually cost about VND1.7-3 (USD82-144) million per kilo. These cheap lobsters are probably bad quality."

One customer said they bought one kilo for VND110,000, but complained about the taste, saying that it was bland.

The head of Department of Aquatic Resource Protection and Quality Management in HCMC said, "These lobsters have been dead for a long time and pose a potential health risk."

Doctors also advise consumers to avoid seafood that is not fresh because of the high probability of bacteria contamination.

The lobsters in Khanh Hoa are mostly sold to Chinese traders when exports are limited. Since only a relatively small amount of the product can be sold locally to restaurants, Vietnamese growers have found themselves unable to find buyers.

Khanh Hoa produces 1,000 tonnes of lobster per year, but since Chinese traders have stopped purchasing, the price has dropped from VND2.5 million per kilo to around VND1 million. Hundreds of farmers have suffered from the severe losses.

Banks asked to propose ATM fees

The State Bank of Vietnam has recently asked banks under its system to propose the fees they want to charge ATM cardholders for on-us transactions, or those made on machines of the same bank that issued the ATM card.

The proposals, which must include the expense on each transaction made at the bank’s ATM, the suggested fee collection for every kind of transaction, and the reason why the bank wants to propose the fee, should be submitted to the Payment Administration under the central bank.

The central bank also asked credit institutions to report their input and output costs for their domestic debit card services to serve the ATM fee calculation, which is scheduled to take effect next year.

Specifically, banks have to make full reports about revenues from the debit card services between January 1 and June 30, including ATM transaction fees, machinery and equipment installation expenses, and operational costs.

They should also report the number of ATM cards issued, and the total balances on the cards.

SMEs to enjoy 30% cut on corporate income tax

Small and medium-sized enterprises (SMEs) will be entitled to a 30 percent cut on corporate income tax this year.

Firms involved in labor-intensive production and processing activities will also benefit from the tax reduction under Decree 60/2011 just issued by the Prime Minister.

The Decree, which will take effect as of September 20, is in line with the National Assembly’s Resolution 29 on policies to ease difficulties for organizations and individuals this year.

Furthermore, individuals and household businesses leasing out houses to students and workers will be exempted from lump sum tax this year, while businesses providing catering services for workers are exempt from value added and corporate income taxes.

In addition, individuals with taxable income within the first tax bracket from their salaries and business activities will be exempted from personal income tax beginning on July 1, 2012 until the end of the year.

Registration required for seafood exports to China

Vietnamese seafood exporters will be required to register with Chinese authorities in order to be able to ship their products into the country, according to the Vietnamese Embassy in China.

Exporters will have to register their information with the Certification and Accreditation Administration, under a mandatory regulation set with a deadline of May 1, 2013.

The requirement is levied following the Provisions on Administration of the Registration of Overseas Production Enterprises for Imported Food issued by the China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) on March 22, and the Catalogue of Imported Food of Enterprises Subject to Registration, on May 7.

The Vietnamese Embassy thus informed the Ministries of Industry and Trade, and Agriculture and Rural Development of the news, in order for them to ask local seafood exporters to complete the registration before the due date.

Vietnam’s seafood export turnover in the year to July topped US$3.4 billion, up 6.6 percent year on year, according to the General Department of Statistics.

Shipments of all commodities to China in the same period stood at $7 billion, a 21.9 percent increase, and 11.1 percent of the country’s total export turnover.

VN enterprises, consumers more optimistic in future prospects: surveys

Vietnamese enterprises and consumers are becoming more optimistic in future prospects than their regional peers, according to the latest survey of two international consulting firms.

The International Business Report of Grant Thornton International has found that business confidence of Vietnamese firms has slightly recovered in the second quarter of 2012 after a fall in the previous quarter, and businesses are also expecting bullish sales in the next 12 months.

The IBR, a quarterly survey of over 3,000 business executives from around the world, was conducted in May and June 2012 at 250 companies in Southeast Asian Nations (ASEAN) with scales ranging from 20 to 599 employees.

Regional business confidence fell 4 percent, to 23 percent, in Q2/2012.

In particular, Thai and Vietnamese firms shared the same view with 8 percent of surveyed businesses saying they were optimistic about the future outlook.

The rate of Vietnam in Q1/2012 was 4 percent, a 30 percent drop from Q4/2011.

Regionally, the Philippines are the most optimistic about their economy in the next 12 months, with 90 percent of respondents saying they are optimistic, while Malaysian enterprises are quite pessimistic, with 0 percent. The rate was 12 percent in Singapore.

The report also showed that Vietnamese enterprises are the most upbeat on business results, with 86 percent of the respondents expecting revenues to increase in the next 12 months, compared with a 51 percent rate in other ASEAN countries.

Also, while firms in Singapore do not expect profits to rise in the next 12 months, with only 19 percent of respondents answering optimistically, up to 78 percent of polled Vietnamese enterprises said they expect increased profits.

In addition, 28 percent of ASEAN businesses said they planned to increase investment in research and development (R&D). Of these, 34 percent of Thai businesses are planning to invest in R&D in the next 12 months, followed by Vietnam and the Philippines ,with 32 percent and 30 percent respectively.

However, financial costs for businesses are a major factor inhibiting growth of ASEAN businesses (32 percent), led by Vietnam (50 percent).

In Vietnam, the decline in global trade is a special concern of the businesses. The lack of orders and demand reduction were raised by 50 percent of the respondents as the leading factors suppressing growth of their businesses.

The Vietnam Consumer Confidence Index inched up one point to 95 in Q2/2012, according to the latest quarterly Consumer Confidence Index findings from Nielsen.

Regionally, consumer confidence levels across Asia have continued to decline in the second quarter of 2012 with a score of 100, down three points from Q1 2012.

However, consumers in Asia remain more optimistic than many of their global counterparts, according to the latest quarterly Consumer Confidence Index findings from Nielsen.

Confidence levels declined in many markets across Asia, with just five markets, including Indonesia, Malaysia, Hong Kong, Vietnam and South Korea, recording an increase in confidence levels for the quarter.

Malaysia posted the strongest gain in Asia, up four points compared to Q1 2012. Japan and South Korea recorded the lowest levels of confidence in Asia, with scores of 57 and 50 respectively.

Nielsen’s survey also revealed that up to 86 percent of Vietnamese respondents have adjusted spending to save on household expenses compared to last year, mostly in gas and electricity (70 percent), out-of-home entertainment (63 percent), new clothes (63 percent), upgrading technology (53 percent) and telephone expenses (51 percent).

According to Nielsen’s survey, 58 percent of Asian consumers felt their local job prospects in the next 12 months were good or excellent, down three percentage points from the previous quarter.

In Vietnam, 46 percent of respondents say their job prospects over the next 12 months are good/excellent, decreasing 7 percentage points from the previous quarter and 11 percentage points versus a year ago.

More than half (59 percent) of online consumers in Asia considered their personal finances over the next twelve months to be good or excellent, down four percentage points from Q1 2012, but increasing two percentage points from Q2 2011.

One in two Vietnamese respondents (51 percent) reported their state of personal finance as good or excellent over the next 12 months, slightly increasing from 49 percent in Q1 2012, but still lower than a year ago (56 percent).

The Top 5 Concerns of Vietnamese consumers in Q2 2012 include the economy (19 percent), job security (18 percent), increasing utility bills (12 percent), increasing food prices (7 percent), and health (8 percent).

The global economy is experiencing a widespread "decline of confidence" as problems mount in the euro zone and beyond, The Wall Street Journal quoted International Monetary Fund Managing Director Christine Lagarde as saying.

Lagarde told The Wall Street Journal that policy makers everywhere must maintain a "crisis-management mode" as risks increase. The IMF is pressing governments around the world to step up their response as both advanced and emerging economies show troubling slowdowns.

Vietnam’s growth outlook brighter, ANZ says

The national economy is expected to achieve higher growth and inflation is likely to drop further in the second half of 2012, according to ANZ Bank’s latest report released on August 2.   

The report predicted that Vietnam’s inflation would stand at 6-7 percent in the next two quarters of this year. The country’s current policies are going on the right track to boost economic growth and control inflation in the 2012-2013 period. The Government of Vietnam can continue loosing its monetary policies, it said.

The report expressed ANZ’s concern about the negative impact of the global economic downturn on Vietnam’s economic growth, saying it’s no easy task to achieve an average growth rate of 5.5 percent in 2012.

It said global economic fluctuations in recent years have lowered Vietnam’s industrial growth, which plays a key role in the national economy. Retail sales in July showed a modest increase of 22.2 percent, one percent lower than the previous month.

The report also forecast that Vietnam would continue reducing banks’ interest rates in the next six months to boost economic growth.

 Hanoi hosts Vietnam CEO Summit

More than 400 domestic and foreign delegates attended the Vietnam CEO Summit 2012 titled “Corporate restructuring: Case Studies and Good Practice for Vietnamese Enterprises” in Hanoi on August 2.    

At the summit, many economic experts said Vietnam has obtained rapid economic growth in recent years, thanks to the robust development of the industry and services sectors, the shifting to manufacturing products of high added value, and engagement in regional production network.

However, they said business environment is considered to be less attractive than in other countries in the region.

The large budget deficit, limited management capacity of the State apparatus, high risk of corruption, incomprehensive infrastructure and technology, and environmental issues are all big barriers to economic development.

In addition, Vietnamese businesses are facing challenges such as a lack of economic strategy and human resources, imbalance in capital and problematic development models.

The economists suggested that to overcome difficulties, domestic business should improve their capacity by implementing comprehensive restructuring plans, ranging from technology, and finance to human resources.

At the summit, experts and businesses discussed case studies on restructuring in Vietnam and overseas to learn important lessons for Vietnamese enterprises. They also talked about macroeconomic prospects and the business environment in 2012-13.

Pepper exports forecast to earn US$780 million

If the price of pepper remains as high as in July at more than US$7,000 per tonne, pepper exports in 2012 can reach 110,000-115,000 tonnes, to earn US$770-780 million in revenue, according to the Vietnam Pepper Association (VPA).
    
In case things are not as expected, many pepper farmers may keep their harvested pepper in stock, waiting for the price to rise again.

The VPA has warned pepper enterprises that they need to think twice before signing any import and export contracts to avoid risks.

It has asked the Government and relevant agencies to help pepper farmers and enterprises access loans at low interest rates to expand their pepper growing areas and processing facilities.

The VPA has also proposed that companies involved in pepper business be exempt from value added tax (VAT).

 European firms’ confidence index in Vietnam down

The business confidence and outlook among European businesses in Vietnam has fallen below the “neutral” index midpoint of 50 for the first time, according to the European Chamber of Commerce in Vietnam (EuroCham).   

38 percent of the businesses that participated in the survey are active in the services industry, about 30 percent in manufacturing and the rest in trading or other activities.

Compared to the last survey, there was a 7 percent drop in respondents assessing their current business situation as ‘good’ from 34 percent to 29 percent, down from 43 percent one year ago. Only one percent of respondents described their current situation as ‘excellent’. The neutral assessment of the current situation remained constant at around 30 percent. But worryingly, there was an increase in the number of businesses viewing their current business situation ‘very poor’ to 10 percent. A total of 39 percent have a negative view of their current situation.

Only 31 percent stated a ‘good’ or ‘excellent’ outlook. This is down from 38 percent last quarter and a significant drop from the 42 percent of respondents that had a positive business outlook in the 2nd quarter 2011. The shift has been towards a negative outlook with 31 percent assessing their business outlook as ’not good’ or ’very poor’. One year ago only 20 percent of respondents had a negative outlook.

When asked about their investment plans for 2012, respondents are roughly split in thirds about whether to increase their investment, maintain the same level, or reduce their investment in Vietnam. Only 32 percent of respondents were looking to increase their investment in the country. That is a slight fall from 36percent in the last survey and a plunge from the 52 percent that were planning to do so one year ago. A staggering 33 percent of businesses in this survey are planning to reduce their investments with 20 percent of them stating that they will ‘significantly reduce’ their investments in Vietnam this year.

In the survey one year ago, only 4 percent of respondents anticipated a significant reduction of their investment in Vietnam. This shows a continuation of the trend that businesses are getting more cautious about investing and some are starting to plan a reduction of their activities in Vietnam. The number of companies that are looking to maintain their current level of investment slightly dropped, but remained relatively constant at 31 percent.