Vietnamese market attractive to US investors

US investors are showing their keen interest in the Vietnamese market thanks to political stability and cheap labour costs.

Many US business groups like Intel and IBM have reaped substantial success in Vietnam. Major financial institutions such as Citibank, JP Morgan Chase, Wells Fargo, and Far East National Bank have also recently invested in Vietnam, establishing a solid foundation for US businesses to continue expanding into the Vietnamese market.

In early 2013, famous US company Procter & Gamble (P&G) invested US$80 million to upgrade its Pampers Baby Care factory in the southern province of Binh Duong.

P&G Vietnam General Director Emre Olcer described Vietnam as one of his company’s priority markets. The company’s investment capital has tripled so far, reaching US$200 million in 2012, and is expected to rise in the future.

The US KKR & Co investment fund has also decided to invest an additional US$200 million in Masan Consumer Corp’s business activities.

According to experts, the investment decisions of US businesses demonstrate their trust in the Vietnamese market despite domestic and international economic difficulties.

Rice price will stablise before increasing

The price of rice in the Mekong Delta will remain stable but is likely to rise in the near future thanks to the signing of major contracts and reserve rice purchases following the Lunar New Year.

At a meeting in HCM City on February 1, Vietnam Food Association (VFA) President Truong Thanh Phong said that the Ministry of Industry and Trade (MoIT) agreed with the VFA’s proposal that entrepreneurs and businesses be authorised to export fragrant, sticky, and broken rice to major markets boasting good prices and high demand.

To ensure high quality rice price stability, the VFA will increase the ceiling price of 5 percent broken rice to US$410 per tonne from February. The ceiling price of 35 percent broken rice will remain at $365 per tonne.

 The VFA says it aims to discourage businesses from selling rice if the Vietnamese rice price is US$30–40 lower per tonne than Pakistani and Indian rice prices.

The VFA also asked the MoIT to strengthen trade promotion—especially in African countries. It also requested avoiding signing major contracts through brokers, saying organising the contracts through the government will help stabilise the market and improve rice export efficiency.

Mekong Delta’s tra fish exports aim for US$2 bil

The Mekong Delta provinces are aiming to boost tra fish export turnover to US$1.7–2 billion this year.

The Mekong Delta will allocate an additional 6,000 hectares of water surface area to tra fish breeding, particularly in the provinces of Dong Thap, An Giang, Ben Tre, and Can Tho City.

These provinces will employ advanced tra fish breeding technology, monitor tra fish production and consumption trends in both domestic and international markets, and improve forecast capacity to help tra breeders adjust production and avoid losses.

They have also encouraged breeders to tighten cooperation with businesses in the tra fish industry, reducing investment costs borne by households and securing outlets for their products.

In 2012, the Mekong Delta provinces assigned 5,910 hectares of water surface area to tra fish breeding. Output almost reached 1.29 million tonnes, of which 645,000 tonnes was later exported.

2013 predicted to open up prospects for Vietnamese goods

Forecasts are confidently predicting the EU market’s promise for Vietnamese goods in 2013 as both sides maintain their traditionally stable relationship and intensify their efforts towards the signing of the Free Trade Agreement (FTA).

Vietnam’s export turnover to the EU market grew by 20 percent in 2012 despite the economic difficulties hampering the European bloc.

According to Ministry of Industry and Trade (MoIT) statistics, 2012’s total export-import turnover between Vietnam and the EU was an estimated US$28.3 billion, up 16.5 percent on 2011. Vietnam’s exports to the vast market hit US$20 billion, up more than 20 percent, while imports reached US$8.3 billion, up 7.2 percent on the previous year.

Vietnam’s key EU exports include telephones and electronic components, valued in excess of US$5 billion last year and topping the list of commodities with high EU market export turnover.

Vietnamese footwear, garments, and textiles earned approximately US$2.5 billion, while revenue from computers and electronic products was estimated at US$1.3 billion.

Vietnam’s staple EU imports are machinery, spare parts, transport vehicles, and pharmaceuticals.

Both Vietnam and the EU are preparing for FTA negotiations with the aim of creating a favourable trading environment for the former.  Most Vietnamese products—agricultural products, food, footwear, and garments and textiles—will be granted a zero percent tax rate.

The negotiations will add fresh impetus to accelerating trade exchange between Vietnam and the EU and open up prospects for Vietnamese businesses to gain access to the EU and attract its investment over the long term. Experts argue the FTA will help Vietnam improve the position of its economy in the global production chain.

Vietnamese-EU bilateral trade ties will still need to overcome the inevitable challenges arising from Europe’s sluggish economic recovery. The MoIT warns Vietnam’s EU market export growth rate is likely to halve to 10 percent in 2013.

Some key Vietnamese export sectors are anticipating to numerous difficulties this year. The Vietnam Textile and Apparel Association (VITAS) says that along with the country’s shrinking exports to other major markets—Russia and the US—its exports to the EU market are also forecast to fall due to lower consumer demand and tougher pricing competition from foreign garment and textile exporters.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has raised concerns about the sector’s ability to increase EU market export turnover in 2013.  The association argues the decline in seafood export turnover to the EU market will linger through all four quarters of the year.

Experts suggest many Vietnamese businesses have not completed the required updates to information about their products destined for the EU. The EU market demands high standards and strictly follows its own regulations and those of other international organisations. Businesses need to maximise their adaptability to technical barriers and the EU’s food hygiene and safety criteria and anti-dumping mechanisms.

Milk factory meets international FoQus requirements

Friesland Campina Ha Nam milk factory in northern Ha Nam province has been certified by the Royal FrieslandCampina Group to meet the requirements of the Food Safety and Quality System (FoQus), an international quality management system.

Following a number of improvements to its management process, infrastructure and equipment in the last two years, the factory received an A-rating (the highest FoQus grade) in December, 2012.

The rating allows Friesland Campina Ha Nam to produce infant and baby milk formula.

FoQus is developed by Royal FrieslandCampina and applied across the group to satisfy consumer demand for quality, as well as strict national and international regulations.

HSBC: Vietnam economy recovering

The Hong Kong and Shanghai Banking Corporation (HSBC) released its Vietnam Manufacturing PMI (Purchasing Managers’ Index) in January, 2013, which showed that Vietnam’s economy is recovering despite many difficulties in the coming time.

The index rose to 50.1 in January, up from 49.3 in December, 2012, meaning manufacturing production increased for the third successive month. Companies benefited from a slight increase in new orders from the domestic market.

However, demand from overseas remained weak, leading to a fall in new export orders. Vietnamese manufacturers reported declining new orders from the Eurozone and China.

Vietnam’s manufacturing sector saw marginal job growth in January. There was also a solid increase in average input price, a significant turnaround from the previous month.

On the other hand, Vietnamese manufacturers still want to reduce their stock level in January, which is reflected in the continuous decline in stockpiled raw materials and finished goods. The decline in stored finished products was the deepest in the past 22 months. Purchasing power also rose for the second time in the last three months.

Trinh Nguyen, an economist at HSBC, hoped that Vietnam’s economy will continue to recover in 2013, with superior growth to 2012. However, he warned that the recovery process is still fragile as there is economic restructuring in progress. The rising price of goods and inflation is another challenge.

Starbucks plans more Vietnamese coffee purchases

Starbucks Corp, one of the world’s leading retailers, roasters, and brands of specialty coffee, is committed to purchasing more high-quality Vietnamese coffee in the future.

The commitment was made by John Culver, the Chairman of Starbucks’ Chinese and Asian-Pacific market operations, at a February 1 ceremony in Ho Chi Minh City inaugurating the company’s first Vietnamese outlet.

Culver highlighted the Vietnamese market’s potential. Saying Starbucks plans to open more retail outlets in Hanoi as well as other big cities across the country.

He also shared experiences in local coffee industry development and the farming techniques that deliver high-quality coffee (including Arabica beans).

Starbucks Asia-Pacific Chairman Jinlog Wang acknowledged Vietnam’s pre-existing coffee culture, promising the firm will maintain harmony between local expectations and global standards to provide customers with better service.

WB appoints new Vice President for East Asia and Pacific

World Bank Group (WB) President Jim Yong Kim has appointed Axel van Trotsenburg the WB’s new Vice President for East Asia and Pacific, effective February 1.

Trotsenburg will lead the Bank’s advisory services and lending operations in a dynamic region which now accounts for 40 percent of global growth.

“I am excited to join the team serving East Asia and the Pacific, a region leading the global economy in growth and poverty reduction, with an increasing need for innovation and knowledge,” he said.

He pledged to work closely with regional countries to help deliver practical development solutions and create opportunities for all.

It is expected that Trotsenburg will bring his extensive global development experience to the position to improve the lives of the poor in countries at all stages of development.

Most recently, as Vice President for Concessional Finance and Global Partnerships, he led negotiations for the last resources replenishment of the International Development Association (IDA). The IDA has raised a record US$49.3 billion for the world’s poorest countries over the three-year period ending June 30, 2014.

As Vice President for East Asia and the Pacific, Trotsenburg will manage a US$31.8 billion portfolio for the International Bank for Reconstruction and Development (IBRD) as well as the IDA. Anticipated lending for the 2013 financial year is US$5.8 billion.

US remains Vietnam’s top seafood export market

The US remained Vietnam’s top seafood market in January although it has raised a number of trade barriers against the country’s exports, according to the General Department of Fisheries under the Ministry of Agriculture and Rural Development.

Seafood exports to the US occupied 19.15 percent of the total last month, followed by those to Japan and the Republic of Korea with 17.81 percent and 8.36 percent respectively.

Vietnam’s January seafood exports brought 376 million USD to the country, a year-on-year increase of 3.5 percent.

This year is considered as tough for Vietnam’s seafood exports due to a shortage of capital, materials and labour.

However, experts have forecast an increase in global demand in a near future, and the sector is likely to earn 6.4 billion USD this year.

To boost seafood exports, the ministry urged the sector to continue investment in raw materials and intensify technology improvement, supervision on product quality as well as trade promotion activities abroad.

Ca Mau’s aquatic exports to hit 1 bln USD in 2013

The Southernmost province of Ca Mau earned nearly 60 million USD from aquatic exports in January, a year-on-year increase of 16 percent which is the highest record during the last five years.

According to statistics, the province exported 35,000 tonnes of aquatic products in the first month of 2013, an increase of 3 percent over the same period last year, and is on track to fulfill its target of shipping 380,000 tonnes oversea this year.

Local authorities expect aquaculture will be a spearhead sector in the province’s economic development and work out a series of measures to achieve the goal, prioritising in shrimp breeding, technology transfer and loans for farmers.

Ca Mau province hopes to export one billion USD worth of aquatic products, despite of anticipated difficulties for its aqua cultural economy during 2013 such as water shortage, high investment costs and shrinking export markets.-

Exports to ASEAN region increase 25.7 pct in 2012

Vietnam's exports to ASEAN topped 17.08 billion USD in 2012, surging 25.7 percent over the previous year.

The figure accounted for 14.9 percent of the country's total export value in the year, according to the General Department of Customs' statistics.

The strong growth was attributed to significant increases in value of key export items including computers and electronic products (up by 844 million USD), mobile phones and components (750 million USD), rubber (339 million USD), steel (243 million USD), and coffee (224 million USD).

However, exports of rice, which usually made up the largest ratio of the country's exports to ASEAN, were down by 518 million USD.

During the period, Vietnam also imported 20.76 billion USD worth of goods from the bloc including oil and gas, motorbikes, automobiles, spare parts, steel and iron, representing a modest slump of 1 percent.

Singapore remained Vietnam's largest trading partner at 9.03 billion USD, making up 23.9 percent of the country's total export earnings to the bloc.

It was followed by Thailand at 8.41 billion USD (22.2 percent), Malaysia at 7.91 billion USD (20.9 percent), Indonesia at 4.61 billion USD (12.2 percent) and Cambodia at 3.32 billion USD (8.8 percent).

Experts predicted that two-way trade between Vietnam and ASEAN this year was likely to increase as Vietnam continued to accelerate trade promotions in ASEAN and foreign businesses in the bloc continued looking for trade and investment opportunities in the country.

In order to foster exports to the bloc, experts have encouraged enterprises to take part in more trade fairs and exhibitions and update their knowledge of the market, while focusing on technical innovation to improve product quality.

A recent survey conducted by the ASEAN Business Advisory Council revealed that Vietnam was the second most attractive investment destination in the region.

The survey questioned 405 business people and industry leaders, with 50 percent selecting Indonesia as ASEAN's best investment destination, followed by Vietnam with 46 percent.

Fishing ground forecast centre established

The Ministry of Agriculture and Rural Development (MARD) has set up a centre responsible for forecasting fishing grounds as part of an effort to re-organise fishing activities towards sustainable exploitation of fisheries resources.

The Centre for Fishing Ground Forecast, an affiliate of the Research Institute for Marine Fisheries (RIMF), will carry out surveys and researches in order to build fishing ground forecasting models and update oceanographic data and fishery biology information.

The Hai Phong-based centre, which comes into operation from February, will provide forecasting information and up-to-date bulletins to meet the demand of MARD, the National Directorate of Fisheries, local fishery management authorities and fishermen.

The centre will also work on a project on marine fishing ground prediction which is expected to begin from 2014.

Hanoi’s January export reaches 801 million USD

Hanoi’s export turnover totalled 801 million USD in January, which represented a year-on-year increase of 21.1 percent.

Export of local businesses rose 25.8 percent in the month.

Ten out of 11 export products reported increases in the reviewed month, including farm produce (up 49.7 percent), computer components and peripheral devices (44.4 percent), and glass and glass products (31.4 percent).

Experts forecast a rapid growth in export for the city in the coming time, citing clear signs of recovery in the global market.

However, in the month, the capital city faced a one-month surge of 0.95 percent in inflation. Experts blamed the spike in prices on rising consumer demand ahead of the Tet (Lunar New Year) holiday in February.

The municipal Statistics Office reported that price rises were seen in 10 out of the 11 categories to goods and services used to calculate the consumer price index, with food and services rising by 1.84 percent and garments and footwear by 1.47 percent.

Only the cost of transportation saw a decrease, falling 0.14 percent from December, 2012.

Hanoi ’s economy in 2013 is forecast to face difficulties and challenges more severe than that in 2012.

The city predicts a growth rate of 8-8.5 percent based on the analysis of the domestic and global situation.-

Vietnamese hotels urged to improve quality

The rapid growth of Vietnam’s tourism industry has nurtured the hotel sector, but experts have warned that not all hotels meet the industry’s basic requirements.

Le Mai Khanh, Director of Hotel Department, Vietnam National Administration of Tourism, said that most hotels in the country are small-scale with less than 20 rooms. Many of them lack professionalism in terms of design, management and staff training.

The Vietnam National Administration of Tourism has issued many hotel regulations and standards since 1994, but they are outdated and do not meet the requirements of tourists or international standards today.

As a result, the Ministry of Culture, Sports and Tourism is developing a National Standard for the grading of tourism accommodation, and will continue to invest in the system to improve efficiency.

The grading system is the foundation for better hotel management, and will create healthy competition based on service quality.

City retailers launch big promotion during Tet

Retailers in Ho Chi Minh City are launching numerous promotional campaigns hoping to cash in on the shopping fever as the year’s biggest festival, the Lunar New Year (Tet), is only days away.

As part of the Tet promotional campaign, Big C supermarket has offered discounts from 5-50 percent for more than 800 food items until February 9, the last day of the lunar 2012, coupled with additional gifts.

The chain of Co.opmart supermarkets have cut the prices of around 2,000 various items by up to 49 percent under its special Tet promotion. Co.opmart Director Nguyen Thanh Nhan said that the supermarket has spent a huge budget for this promotional campaign. Besides, the chain has maintained the prices of nine groups of essential goods in line with the city’s programme on stabilising prices, to ensure that local residents can enjoy a decent but economical Tet holiday.

The local shopping TV channel HTCo.op also offers hundreds of products with discounts up to 49 percent.

In addition to promotion campaigns, retailers are also working hard to provide quick and careful services for customers despite surging demands.

According to Duong Thi Quynh Trang, Big C Director for External Affairs and Public Relations, the supermarket is implementing intensive plans to ensure best services for shoppers in the upcoming Tet holiday, including opening more checking counters, and extending opening hours by up to 2 hrs per day from now until the February 9.

The municipal authorities have been keeping close inspection on the operation of supermarkets and shops for smooth circulation of goods and product quality.-

Ecosystem service scheme shows promise as parties share profits

Vietnam earned 58 million USD from the collection of payments for eco system service (PES) schemes in 2012, the equivalent to the State budget allocation for the forestry sector.

Vice Minister of Agriculture and Rural Development Ha Cong Tuan praised the news of the income. "This is an encouraging figure given that this scheme was put in place on a wide scale just a year ago. It has been proved that PES is a good scheme to raise funds for forest protection," he said in a briefing to foreign partners reviewing the sector's performance at the annual meeting of the Forest Sector Support Partnership held in Hanoi on January 31.

In 2012, PES was collected from hydro-electric plants and water supply plants. The agriculture ministry is working on other potential sources including eco-tourism.

Some other key figures for the forestry sector have also been revealed. The export revenue of the timber processing industry last year was 4.6 billion USD, a 17 percent increase from 2011's figure.

Forest coverage increased from 33.2 percent in 2009 to 39.7 percent last year, which was close to the 40 percent target.

Last year also saw a remarkable increase in official development assistance (ODA) funding channeled into the sector. There were eight projects whose total financing was worth 117 million USD compared to about 29 million USD in 2011.

Deputy Director General of the ministry's Forestry Department Vo Dai Hai said the sector will have to adjust itself to changes in the international market that may affect Vietnam 's export-based timber processing industry.

In the meantime, the focus is to ensure Vietnamese timber products meet the requirements of import markets, such as the European Union's Forest Law Enforcement and Governance regulations and the United States ' Lacey Act, which ban the import of any wood products made from illegally harvested timber.

Hai said Vietnam would need international assistance to ensure this is achieved.

The meeting was held by the ministry in co-operation with Japan International Cooperation Agency and German Agency for International Cooperation.-

Dubai group develops $30billion property project in Vietnam

Global Sphere, a Dubai-based development company, has launched a US$30 billion “Hanoi Wall Street” real estate project that will cover an area of 35 sq km.

Global Sphere Board Chairman Dr Abdullah Al Sayegh said the project is an integrated complex with a total value estimated at US$30 billion. The first phase, valued at US$10 billion, is expected to be finished by 2020.

The project, 4 km from Noi bai International airport, is the largest Vietnamese venture invested by an UAE-based company. Its completion is scheduled for 2030.

The engineering plan for the project resembles downtown Dubai, he said, adding that it will accommodate between 300,000 to 400,000 residents. Global Sphere consulted with UAE engineering firm NEXT.

Established over 10 years ago in Dubai, Global Sphere is associated with many European and American enterprises sourcing funds for large commercial and government projects in sectors including construction and oil .

Al Sayegh said Global Sphere serves as a gate for many UAE enterprises to enter the Vietnamese market because the project is entirely self-funded. All the company’s projects are in development and investment.. The embassies of both countries were also involved.

He noted Global Sphere is interested in promoting business in underdeveloped African and Asian countries.

The company normally acts as a project partner, providing between 80–100 percent of required funding, meaning profit-sharing and retrieval is a case-by-case arrangement based on the negotiations of parties involved.

Al Sayegh stressed the project is the company’s first of its type in Vietnam but Global Sphere  is also involved in a number of additional contracts including the construction of Hoang Son Cement Company and a solar energy production partnership with Worldtech Corporation.

New policies needed to boost confidence

The National Centre of Socio-Economic Information and Forecasting is calling on the Government to devise new policies to boost business confidence.

It also urges enterprises to improve the quality of their products and services in order to enhance their competitiveness.

The centre recently conducted a survey involving about 910 enterprises operating in trade, services, manufacturing and processing in northern Bac Giang Province and the cities of Hanoi and Danang and Ho Chi Minh City.

The head of the centre’s world economic department, Luong Van Khoi, said that business confidence saw improvements in the fourth quarter of 2012 and would continue to improve in the first half of this year based on the confidence that enterprises have  expressed in Government policies to stabilize the economy.

While the business status index in the manufacturing and processing sectors rose from 9 points in the third quarter to 19 points in the fourth quarter of last year, manufacturing and processing enterprises remained worried about rising input cost and stagnant demand, all of which might impact their decision to expand production, Khoi said.

To boost business confidence and stimulate the economy this year, the centre has proposed the Government continue to loosen monetary policies at a reasonable pace to increase the ability of enterprises to access capital as well as to provide guarantee for small- and –medium-sized enterprises.

Policies to accelerate demand through personal income tax reductions, subsidies and consumer promotion programmes were also needed, the centre said.

The centre advised enterprises, meanwhile, to focus on expanding export market and increasing their involvement in regional and global value chains.

Impressive January agriculture exports

The Ministry of Agriculture and Rural Development (MARD) has reported January’s agricultural exports earned US$1.17 billion, up 46.6 percent over 2012.

Rice export volume reached 534,000 tonnes, worth a total of US$259 million and showing a year-on-year 108.5 percent increase in volume and a 76.4 percent increase in value.

China was the biggest importer of Vietnamese rice in 2012 and is predicted to remain so in 2013. Import volume and value is declining in some markets like Indonesia, Singapore, and Senegal.

Vietnam exported 191,000 tonnes of coffee in January, valued at US$387 million. It represents an increase of 70.6 percent in volume and 70.7 percent in value against January 2012.

Two major consumption markets—the US (occupying 12.51 percent of market share) and Germany (11.63 percent)—saw a relatively high growth in both volume and value.

Vietnam maintained its world leading position in cashew nut exports with a turnover of US$88 million (equal to 14,000 tonnes). The industry’s main markets are the US (making up 27.6 percent of market share) and China (19.6 percent).   

In January, rubber export volume reached 76,000 tonnes and earned US$182 million—up 8.8 percent in volume but down 5 percent in value against last year.

Other products such as pepper, cassava, and tea showed increases in both volume and value.

Aquaculture-forestry-fishery exports amounted to US$2.17 billion, rising by 39.7 percent compared to January 2012.

The Ministry of Industry and Trade (MoIT) and trade associations are running promotional campaigns aimed at boosting exports, and businesses are in the process of reserving goods and seeking importers.

Linking the RoK’s tourism market to Thua Thien Hue

Thua Thien Hue’s provincial Department of Culture, Sports, and Tourism Director Phan Tien Dung has announced the February 4 signing of a cooperative agreement linking the province with the Republic of Korea’s tourism market.

The agreement details how the RoK’s Zeta Plan F & Investment Co, Ltd will serve as a brokerage company helping Korean tourism enterprises establish relationships with counterparts in Thua Thien Hue, maximising potential mutual benefits and industry development.

Zeta Plan F & Investment Co, Ltd’s 2013 plans include launching medical tourism ventures, tours exploring the World Heritage-listed attractions of Seoul and Thua Thien Hue, and cruise ship tours to Vietnam’s central coastal provinces.

Both sides have also reached consensus on applying recent material technology advances during future infrastructure upgrades. The Korean Company will contribute RoK’s material technology innovations to a rural road transport project in Thua Thien Hue Quang Dien district.

Hanoi: tourists travelling during Tet holiday up 35 pct

Travel operators are reporting the upcoming Tet holidays have attracted many customers interested in package tours, amounting to a 35 percent increase over last year.

The capital city’s tourism industry has described this year’s Lunar New Year (Tet) holidays as the "9 golden days" of spring travel.

Many Tet tours were already fully booked by early January, forcing customers to look elsewhere.

Vietravel Company’s Marketing Chief Duong Mai Lan said that from February 7- 15, her Hanoi company has booked 3,000 customers for tours. Currently 80 percent of domestic tours and 98 percent of international tours are booked out.

Vietrantour Tourism Company has also seen high customer numbers. So far 95% of its tours have been fully booked.

Vietrantour Communications Head Do Thu Anh said the number of customers booking tours during Tet increases by 12 percent on 2012.

The most popular tours are to new destinations and short-day tours (which only last 4–5 days).

Short-day tours to southern tourist attractions are now the best options—Nha Trang, Danang, Sapa, and Ha Giang, or neighboring countries such as Thailand, Singapore and Malaysia.

Thai tours are heavily discounted and promoted.

Apart from relaxation and entertainment fuelling demand, stable prices despite the holiday are also encouraging customer interest. Many travel agencies secured their tours’ services early.

Hanoi’s Department of Culture, Sports, and Tourism has guided the capital city’s travel agencies and hotels to ensure guests’ security and safety, paying particular attention to fire and explosion prevention, public transport, strict compliance with registration and price listing regulations.

Mekong Delta’s tra fish exports aim for US$2 billion

The Mekong Delta provinces are aiming to boost tra fish export turnover to US$1.7–2 billion this year.

The Mekong Delta will allocate an additional 6,000 hectares of water surface area to tra fish breeding, particularly in the provinces of Dong Thap, An Giang, Ben Tre, and Can Tho City.

These provinces will employ advanced tra fish breeding technology, monitor tra fish production and consumption trends in both domestic and international markets, and improve forecast capacity to help tra breeders adjust production and avoid losses.

They have also encouraged breeders to tighten cooperation with businesses in the tra fish industry, reducing investment costs borne by households and securing outlets for their products.

In 2012, the Mekong Delta provinces assigned 5,910 hectares of water surface area to tra fish breeding. Output almost reached 1.29 million tons, of which 645,000 tons was later exported.

Northern, central regions enter drought season

The National Hydro Meteorological Forecasting Center has said that river level is quickly receding due to dry weather in the northern and central regions.

Red River level dropped to only 0.96m in Hanoi in January. At present, it has slightly surged in the lower reaches thanks to water released for winter spring rice crop from hydropower plants like Thac Ba, Hoa Binh and Tuyen Quang.

The drought has also occurred in the central and central highland regions, where the water level on main rivers like Ma, Ta Trach, Tra Khuc and Cai Nha Nhang is 20-72 percent lower than previous years.

Salt intrusion is expected to occur earlier this year in river mouth areas in the central and Mekong Delta regions.

Group urges end to jewelry export tax

The Vietnam Gold Business Association (VGBA) has urged the State Bank of Vietnam to abolish the export tax on jewellery which is at 10 per cent now.
 
 Staff of Phu Nhuan Jewelry Joint Stock Co shows products to customers.
It said since the ministry imposed the tax on gold with purity of 80 to 99 per cent in August 2011, exports of jewellery and gold artworks have plunged.

With the prolonged economic slump, domestic demand for gold jewellery is also very low.

Meanwhile, the Government has tightened regulations on bullion trading, leaving most gold companies in the lurch.

On the other hand, many countries in the neighbourhood have for years applied zero tax on export of gold jewellery and artworks to encourage domestic producers.

Thailand now exports gold products worth $3 billion a year.

An unnamed association official said Vietnam could be very competitive in producing golden jewellery and artworks for the export market.

Vietnamese 20K (83.33 per cent), 22k (91.66 per cent), and even 24k jewellery and other works are popular in countries like Turkey, Dubai, and China.

But the current 10 per cent tariff makes it difficult for Vietnamese producers to compete with rivals from countries that do not slap export taxes on these products.

The VGBA has urged the Ministry of Finance to continue its policy of not taxing exports of gold products with gold content of less than 80 per cent, and abolish the tax on export of products with higher gold content.

It has also called on the central bank to allow authorised producers of jewellery and gold artworks to import the precious metal.

Only banks and firms licensed to trade gold bullion are now allowed to import.

 95% of illegally-imported chicken contaminated with antibiotics

Around 95% chicken illegally imported , much of which comes from China, has been found to contain levels of antibiotics that could be harmful to health.

This was disclosed during an online forum held on December 31, chaired by Deputy Prime Minister Nguyen Thien Nhan for a one-month review of the implementation of a programme to control the illegal importation of low-quality chicken, under the prime minister’s Decision 2088.

Although the actual transport of this low-grade chicken has decreased, the ways of those who wish to subvert laws have become more sophisticated, said the Ministry of Public Security.

One major point of entry for chicken is in the area of  Lang Son Province, where it is divided into smaller batches and transported on trucks. It is then distributed to localities such as Hanoi, Vinh Phuc and Ha Nam for sales. The price of this kind of chicken is normally just one eighth of domestically-grown poultry.

According to recent tests done by the Ministry of Agriculture and Rural Development (MARD) on illegally-imported chicken sold in Hanoi, Quang Ninh and Lang Son, 20% of sampled fertilised eggs meant for raising domestically, and 58% of chicken meant for consumption tested positive for the H5N1 virus. In addition, 19 out of 20 samples tested were found to contain residues of sulphadiazine.

An official from Bac Giang Province said that it is not easy to differentiate low-quality poultry by the naked eye.  He also complained of difficulties in seizing samples for testing.

The Deputy Minister of Agriculture and Rural Development, Nguyen Thi Xuan Thu, affirmed that there was sufficient domestic supply to meet demand in Vietnam, adding that the average price of a chicken is VND10,000.

MARD has issued instructions that all illegally-imported or substandard chicken be destroyed.

Deputy Minister, Nguyen Thien Nhan, said more efforts should be taken to control the illegal importation of chicken in 2013, adding that domestic supply was sufficient.

To date, police have uncovered 26 Chinese chicken-smuggling rings, operating in 18 northern cities and provinces.

Authorities have been requested to inform the government of results of control measures for illegally-imported chicken before February 8.
 
Times City: Vingroup demands legal action

On 2 Feb, an official document reporting on the publicity of false information about Vingroup, South Hanoi Urban Development Joint Stock Company and Times City Project developed by Vingroup was submitted by Vingroup.

The document was sent to the Bureau of Security II – Ministry of Police and Hanoi’s Public Security, requesting further investigation and proper legal measures.

The document informs of the spreading of false information on Times City Project by a group of clients in online social networks to mislead clients’ community and call for protests. Furthermore, this group of clients also contacted and provided local as well as international news agencies with false information and images on the status of Times City Project as well as on Vingroup. However, understanding the inauthenticity, all agencies have declined on publishing the provided information. However, this group of clients has taken more severe actions by writing articles and providing false information to others, and these misinformative articles were published on some social networks and reactionary websites in order to create negative publicity against Vingroup.

Mrs. Phi Thi Thuc Nga, Deputy General Director of South Hanoi Urban Development JSC., has confirmed this information, she said “we have repeatedly met up to discuss with clients of Times City as well as answering their questions in written documents. We have even asked the law office to intervene, but all we receive is their ignorance. This issue was forced to its climax when they conducted propaganda distorting our image on unofficial communication channels. This action negatively affects not only the business, prestige and benefits of Vingroup but also the security of the Vietnamese business sector and investment environment. Moreover, these actions have supported reactionary websites, providing a misleading image of Vietnamese investment environment.”

Mrs. Nga also continues by stating some members of this group had contacted Vingroup employees to express their request, otherwise they will continue spreading false allegations. However, as a major and professional corporation working with respect to the law, Vingroup does not tolerate unreasonable demands of a group’s interests.

"We plan to give gifts to customers, but they must be valuable and significant ones to all customers, not specifically to any individual group. Everything must be done on a legal basis and principles; We do not tolerate any coercion.", Mrs. Nga said.

Businesses request lower lending interest rates

Enterprises claim lowering the lending interest rate can help the economy, but banks have stated that this would be a difficult task.

Van Duc Muoi, Head of the food processing company, Vissan, said because his company has established a solid reputation and good relations with several banks, which have given them the ability to borrow money with interest rates lower than 10% per year.

However, compared with the cap interest rate of just 7% a year in other Asian countries, Vietnam's interest rates remain relatively high. Enterprises have complained that high interest rates would push up the commodity prices, discouraging consumption.

"The government is trying to lower the interest rates, along with other forms of economic stimulus. The current interest rates for long term loans of 15-16% could pose a problem for many businesses. We would like to see that rate to drop to around 8% this year," Muoi said.

One business owner in HCM City said that his company had to improvise financial plans because of the high lending rates. "There were times when we borrowed from our own employees at an annual rate of 8%. This lowered our dependence on the banks," he said.

Meanwhile, though the lending interest rates for the US dollar are only 5-7%, enterprises are reluctant to take out loans out of fear of fluctuation in exchange rates.

Banks unable to lower lending rates

Annual interest rates have hovered around 8% for one to 12 months deposits and 10-11% for those above 12 months. However, some small-scale commercial banks still apply a rate of 12% for term deposits above 12 months.

Vietnamese banks have shown themselves to be hesitant to lower lending interest rates as long as interest rates on deposits remain the same. Most private bank loans are for terms more than six months.

In the meantime lending interest rates for businesses has reached around 11-15% for short-term loans and 14.6-17.5% for long-term loans, and banks have made no signals of willingness to adjust these rates.

One of the reasons most often given is the required VND100 trillion (USD4.8 billion) required of any bank for their risk-prevention fund, along with caution during an economically difficult period.

Tran Bac Ha, Chairman of Bank for Investment and Development of Vietnam (BIDV), said that even if banks wanted to it would be impossible to reduce lending interest rates.this year.

Nguyen Duc Thanh, Director of Vietnam Centre for Economic and Policy Research, said lowering lending rates could boost the economy but it must be done carefully to avoid inflation and fluctuation in foreign currency values.  

Viettel targets profit of VND34.6 trillion in 2013

The Defence Telecommunications Group Viettel earned revenue of VND141.4 trillion and profit of VND 27.5 trillion in 2012, the group announced on February 3rd.

Along with its high growth rate, last year, Viettel contributed VND12 trillion to the State budget and donated VND 80 billion to social welfare, increasing 20 and 25 per cent, respectively, against 2011.

Also in 2012, Viettel received licenses to invest in the 7 markets of Laos, Cambodia, Timor-Leste, Mozambique, Cameroon, Haiti and Peru. Especially in Mozambique, Viettel’s subsidiary (Movitel) earned profits just 6 months after it began operation. Movitel is Vietnam's most effective project in Africa since 2008.

In 2013, the group targets to increase sales between 15 and 20 per cent to reach VND162 trillion in revenue and 34.6 trillion in profit. Besides, Viettel plans to invest $175 million in foreign markets and earn $120 million from its products in these markets.

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