Business aid plan urged to be approved by NA

Many members of the National Assembly (NA) Standing Committee have asked the government to complete necessary procedures to submit the plan worth VND29 trillion ($1.4 billion) to support local businesses for NA’s final approval.

They have only got some basic information about the aid package recently announced by the government.

NA Vice Chairman Uong Chu Luu said: "It is known that the Government has announced a business support package including tax exemption, reduction or extension.”

“As a result, the NA Finance and Budget Committee should review for any provisions of law relating to the issue. What stays within the jurisdiction of the NA must be passed by NA resolutions," he said.

Chairman of the finance- budget committee Phung Quoc Hien told Tuoi Tre the government had no suggestions to the committee, but through the press the committee knew that the government would give the package to solve business problems by relaxed tax policies.

"The tax-related issues must be submitted to the NA.”

“The NA Office should early inform the government to prepare for proper procedures and paperwork, and the committee needs time to verify the problem so that the NA can issue its own resolutions later," Hien added.

National Assembly Chairman Nguyen Sinh Hung has also asked to bring this issue to NA so that the NA could vote for resolutions.

For the national economic restructuring project, after discussions with many different opinions, the NA chairman Nguyen Sinh Hung has also decided to bring this issue to the NA table.

The summary of comments will then be returned to the government for research and the NA will not issue a resolution.

Shares soar on high volumes and values

Stock closed this morning's session higher at both national stock exchanges on high volumes and values.

On the HCM City Stock Exchange, the VN-Index gained 1.18 per cent to stand at 481.92 points on a turnover of nearly VND1.27 trillion (US$60.4 million).

Advancers outnumbered decliners by 205-51, of which 117 codes hit the daily limit rise of 5 per cent.

Shares under the umbrella of PetroVietnam and securities companies were the biggest gainers this morning, with most of these shares soaring to their ceiling prices.

The VN30 Index, which tracks the performance of the 30 leading shares by market value and liquidity, closed 1 per cent higher at 547.98 points. Of these 30 shares, 12 rallied while 8 closed down and 10 were unmoved.

Without positive news, Sao Mai Construction Corp (ASM) surprised the market by becoming the most active stock on the southern bourse this morning with 4.5 million shares changing hands, but they slid 4 per cent to stand at VND23,700 ($1.13).

On the Ha Noi Stock Exchange, the HNX-Index also rose 1.87 per cent to close this morning at 82.79 points, with gainers being four times higher than losers.

Nearly 68 million shares worth a total of more than VND732 billion ($35 million) were exchanged.

After reaching a consensus on merging into Sai Gon-Ha Noi Bank (SHN), shares of Habubank (HBB) rose to the ceiling of VND6,600 this morning, becoming the most heavily-traded stock on a volume of over 6 million shares.

PVGas to list 1.9 bln shares, poised to be blue-chip

PetroVietnam Gas Corp, the country’s leading LPG producer and trader, will list 1.895 billion shares on Ho Chi Minh City’s bourse on May 21, a move for its ambition to list on the Singapore Stock Exchange later.

PVGas, as the PetroVietnam member is known, will list the GAS shares on the Ho Chi Minh City Stock Exchange (HOSE) at an initial price of VND36,000 (US$1.73).

With the price and the huge amount of shares, PVGas would account for more than 10% of the country’s benchmark VN-Index, according to VietCapital Securities Co, which advises PVGas on listing and looking for strategic partners.

At present, Masan Group (MSN), property group Vincom (VIC), finance and insurance group Bao Viet Holdings (BVH), and Vinamilk (VNM) make up more or less 10% of VN-Index each, changing in accordance with market prices. The index has gained 33% so far this year.

HOSE approved PVGas listing on April 16.

PVGas chairwoman Nguyen Thi Lan told her company’s annual general meeting one day later that the firm’s Singapore listing ambition following Vietnam listing aimed to raise capital from international markets and to increase the company’s transparency.

PVGas has selected the Singapore stock market because of its transparency, competition and liquidity, she added.

For this year, the company expects more than VND55 trillion ($2.6 billion) in revenue, VND5,285 billion (more than $254 million) in net profit, and its dividend rate to increase slightly to 20%.

The corporation reported better-than-expected results for 2011. Revenue reached to VND64,224 billion (more than $3.08 billion), 45% higher than the target and up 34% compared to 2010.

After-tax profit was VND6,420 billion (over $308 million), up to 81% higher than the target and increasing by 20% on the previous year.

At the annual meeting, shareholders raised concerns on the company’s growth as Vietnam’s gas reserves are shrinking. Lan said PVGas was seeking to tap new gas fields and was carrying out its liquefied natural gas (LNG) import program. The exporting countries it is looking at include Australia and Qatar.

Vietnam currently has two major natural gas supplies namely PM3 Ca Mau with daily output of four million cubic meters, and Nam Con Son and Bach Ho with total output of 20 million cubic meters a day, according to PV Gas.

Lan added that Vietnam Oil and Gas Group (PetroVietnam) has given business directions that as for contracts to be signed and performed after 2015, PetroVietnam would buy gas and then sell to PVGas.

She said it would not affect business activities of PVGas because in addition to contracts signed with the holding group, her corporation had other deals with gas field owners.

This year, the company will start the Nam Con Son 2 project in Ba Ria-Vung Tau Province, designed to transport seven billion cubic meters of gas a year to southern markets; begin works on a gas production plant in Ca Mau Province with a capacity of 22 million cubic meters of gas per day; and start building an LNG plant also in the south to supply one million tonnes of LNG a year.

HSBC: Vietnam successful in curbing inflation

Vietnam’s successful implementation of tightening measures in 2011 has curbed demand for credit and slowed inflation significantly, said the Hong Kong and Shanghai Banking Corporation in its report released in May this year.

According to the report, credit growth slowed from 27.7 percent in 2010 to 10.9 percent in 2011.

While the State Bank of Vietnam (SBV) reserved the tightening process in late 2011 and eased policy rates in 2012, overall lending fell by 1.9 percent year-to-date through March, suggesting that domestic demand is much lower than expected.

With credit contracting in the first quarter and the economy slowing, the SBV is likely to ease policy rates further in the coming quarters.

Dampened demand has had two positive effects – inflation slowed remarkably and will likely reach single digit by May, and demand for imports slowed significantly, thereby improving the trade balance and the stability of the Vietnam dong.

Even exports, which have been resilient, would slow due to a less competitive Vietnam dong as well as sluggish external demand.

On the whole, net exports should improve due to weaker imports, but domestic appetite for consumption should be particularly low in 2012. As such, HSBC forecasts Vietnam ’s economic growth in 2012 at 5.1 percent and inflationary pressures to ease even more, to 9.8 percent.

The balance of trade and FDI has now been in positive territory for six months, which has aided the stability of the Vietnam dong.

Real rates, as measured using the OMO interest rate, are actually now in positive territory for the first time in over two years, the report said.

Insurance premiums to total $2.2b in 2012
 
The insurance market will continue to expand this year, with total premiums expected to reach VND46 trillion (US$2.2 billion), up 24 per cent from last year, says a recent report from A.M. Best, a credit rating agency covering the insurance industry.

A.M. Best forecasted that inflation would remain a serious concern, eroding consumer spending and increasing compensation costs. Inflation reached 18.8 per cent in 2011, largely from higher food and fuel prices, and was projected to moderate only somewhat in 2012 to a still-high 12.1 per cent.

However, Association of Viet Nam Insurers (AVI) general secretary Phung Dac Loc predicted earlier this year that the insurance sector had the potential to continue to expand further. He forecasted that non-life insurance premiums would increase by about 28 per cent to VND27.5 trillion ($1.3 billion), while life insurance premiums were expected to grow by 18 per cent to VND18.9 trillion ($900 million).

The director of the Ministry of Finance's Insurance Supervisory Authority, Trinh Thanh Hoan, also predicted that total premiums could reach VND43 trillion ($2 billion) in 2012.

Hoan cautioned, however, that companies needed to adapt to the competitive market, and he advised insurers to focus on attracting high-quality human resources, developing new products, expanding distribution networks and concentrating on micro insurance products.

A.M. Best expected difficult economic conditions over the next few years to create a challenging environment but anticipated that insurers would access the stock market and increase fund raising in the second half of the year to support business expansion.

According to the A.M. Best credit rating, Viet Nam has fallen into A.M. Best's CRT-5 (Country Risk Tier 5) category, the lowest tier, for countries considered to present the most risk in the Southeast Asian region.

In comparison, Singapore is assigned to CRT-1, which denotes a stable environment with the lowest proportion of risk. The Philippines and Indonesia were classed as CRT-4, while Malaysia and Thailand fall into the CRT-3 category.

Firms must boost brands, quality to be competive

Time is running out for Vietnamese businesses to consolidate their position in the domestic market as lower tariffs will make it much more difficult to compete against imported goods, industry insiders warn.

Local firms have to build their brands, improve products' design and quality, and strengthen their distribution networks, they say.

They also note that 2015 will be a year of reckoning for many local firms when more than 90 per cent of goods imported from ASEAN countries and China will enjoy zero tariffs under the ASEAN-China Free Trade Agreement.

Vu Kim Hanh, chairwoman of the Business Association of High-Quality Vietnamese Goods, said about two decades ago, quality was the top concern of consumers regarding locally made goods.

Now, besides quality, consumers were paying attention to design and brand names, she said.

She said domestic businesses struggled to build their brand names after Viet Nam joined the World Trade Organisation, which opened the domestic market wider to foreign goods.

In addition, local businesses had to compete with counterfeit and smuggled goods as well, she said.

Their difficulties had been worsened by high interest rates that had pushed up production costs, making locally-made goods less competitive, she added.

Hanh further noted that most Vietnamese businesses had brand names that were established around 20 years ago, while those of some foreign companies penetrating the domestic market had existed for 100-200 years and had a strong position in the world market.

"Thus what is happening is an unequal struggle between local and foreign companies in the domestic market," she said.

However, Hanh also praised local businesses for relentlessly improving their products' quality and design to win consumers' confidence. Many products have received the Vietnamese High Quality Goods Award based on consumer votes.

Le Van Tri, deputy general director of the Southern Rubber Industry Joint Stock Company (Casumina), said his firm and other businesses that received quality awards for 16 years in succession have never stopped improving their products and services to serve customers better.

The annual High Quality Vietnamese Goods Fair, first held 16 years ago, had helped many local businesses build up their brand and expand their distribution networks, Hanh said.

Participating in these fairs also helped them improve their product quality and design thanks to feedback from consumers, she said.

She said the fairs had helped brand names like Vinamilk, Hau Giang Pharma, Casumina, Vissan, Dai Dong Tien, My Hao and Miliket become more familiar to consumers.

Over the years, the fair had been organised more professionally and in accordance with customers' demands, she said.

The association would continue to organise more fairs displaying high quality Vietnamese goods to support businesses in marketing their products, especially in remote areas where distribution was weak, Hanh said.

"It would also support businesses to bring their products to traditional markets and rural and remote areas, so that they become more competitive in the domestic market and are able to penetrate ASEAN markets in the near future," she added.

Tri of Casumina said enterprises wanted the Government to create a healthy business environment by strengthening control over smuggling, setting up technical barriers against imported goods to protect consumers, and improving infrastructure facilities like transportation and power supply to facilitate distribution of domestic goods.

Hai Phong Port to earn $60m this year
 
Hai Phong Port expects to earn revenues of VND1.23 trillion (US$58.6 million) from handling 19 million tonnes of cargo this year, up $300 million and 1.5 million tonnes against last year.

"We will make great efforts to realise the target. However, the results partly depend on factors of business environment, demand of traders and economic development," said Nguyen Van Thanh, deputy director of the Hai Phong Port administration office.

To better satisfy demand of enterprises, the company has invested in raising the port's loading capacity, he said.

Particularly, the port had invested about VND1.5 trillion ($71.4 million) into Tan cang Hai Phong or New Hai Phong Port in Dinh Vu with seven wharves over a total area of 47.5ha, with combined loading capacity of 7 million tonnes of cargo per year. It is the sole port in Hai Phong capable of welcoming 20,000 tonne vessels.

"Six wharves have been put into operation and the port expects to start operation of its 7th later this month," Thanh said.

Duong Thanh Binh, chairman of the management board of the Hai Phong Port, said that bold investment in upgrading equipment and technologies at the port had helped improve loading capacity, shorten the time for handling cargo as well as accelerate the volume of cargo undergoing customs clearance procedures at the port.

Appropriate equipment and technology selection played a significant role because it must be suitable to the financial capacity of each enterprise and at the same time ensure loading requirements – quick, accurate and safe, he added.

The port invested VND450 billion ($21.4 million) to refurbish technologies and improve loading capacity last year.

In the first quarter of this year, the port handled 4.4 million tonnes of cargo, up 7 per cent against the same period last year.

Besides Hai Phong Port, the city has eight others, including Vat Cach, Dinh Vu and Nam Dinh Vu, Song Cam, Dien Dien, Doan Xa, Hai An and a port for seafood. The complex of ports in Hai Phong City makes it the biggest in the northern area and the second largest in the country.

All ports in the city handled a total 10.9 million tonnes of cargo in the first quarter of this year, up 11.8 per cent from the same period last year.

Developers adopt new survival strategies

The State Bank of Viet Nam has loosened its grip on real estate loans recently in a long-awaited move that some industry insiders say may help revive the stagnant market.

The central bank excluded some types of real estate loans from the list of "non-production" loans – a credit category that commercial banks have been specifically ordered to control this year.

As a result, restrictions have been lifted on loans for home repairs, home purchases, and home construction but eligible borrowers are limited to wage earners only. Developers can also apply for bank loans as long as they are developing housing projects for low-income groups or other residential projects that can be put into use by January 1, 2013.

Following the new policy, many banks plan to increase lending to the real estate sector.

However, many real estate developers do not have enough time to wait for low-cost capital sources. Many of them say bank loans are still beyond their reach while their projects struggle to get a move on.

They also say that their loan applications have been rejected by banks for a myriad of reasons.

Some banks have said they have to wait for guidance from the central bank in offering loans to real estate businesses. Some either refuse to lend, or give the excuse that they are restructuring their business debts. Some banks require borrowers to have a stable source of revenue to be eligible for loans.

To survive, many real estate enterprises are trying out various measures to sell their products in order to get back the money for paying old bank loans and continuing incomplete projects.

The Hoang Anh Gia Lai Group, for instance, has recently announced it is likely to cut prices of apartments in some projects by 50 per cent.

Chairman Doan Nguyen Duc said that once prices reach reasonable levels, people would certainly buy. "Low prices play a role in saleability, and can bolster demand in a gloomy market," he said.

Under the HAGL group's plan, bout 2,000 apartments of 60 to 90 square metres will be sold at half their original prices.

Following this trend, many other real estate developers have drawn up plans to wholesale their apartments to investors or cut property prices in order to recover capital and pay back banks debts.

The Quoc Cuong Gia Lai Joint Stock Company has decided to lower prices of apartments at its Quoc Cuong Apartment Complex in Binh Chanh District, and is looking to sell them to the city government for resettlement purposes.

The Hoa Binh Construction and Real Estate Company is seeking partners to transfer its 29,698sq.m Long Thoi residential project in Nha Be District, and the 10,278sq.m Thanh Xuan land lot in District 12. These projects will have prices cut by 10 and 20 per cent.

Some project owners have asked city authorities for permission to divide their apartments into smaller ones that will be more affordable for home seekers.

Meanwhile, several real estate developers have chosen to exchange apartments for building materials. The New Technology Application and Construction Investment Corporation (TECCO) is negotiating such a deal with three building materials suppliers.

Analysts appreciate efforts being taken by developers to sell their products. They say the key attracting customers is to introduce high-quality products at reasonable prices.

Agriculture exports face challenges

Enterprises exporting agricultural, forestry and fishery products will face new difficulties because a new central bank circular limits their ability to access loans in foreign currencies.

On March 8 the State Bank of Viet Nam issued Circular No.03/2012/TT-NHNN on foreign currency lending by domestic credit institutions and foreign bank branches.

Accordingly, from May 2 domestic credit institutions with forex service licence can only extend short, medium and long-term loans in foreign currencies to firms that use the funds for importing goods and services for their production and trading purposes.

This is bound to create a lot of problems for agricultural product exporters who have been using foreign currency loans to do business because the interest rates are much lower than dong loans.

The current interest rate of foreign currency loans is between 6 and 7 per cent per year, while the interest rate on dong loans ranges between 15.5 and 18 per cent per year.

Because of this big gap, several exporters have chosen to borrow loans in foreign currency in order to reduce their financial costs.

The new lending regulation will prevent exporters of seafood, rice, rubber, coffee and cashew from accessing foreign currency loans because they typically buy raw materials in Viet Nam for which payment is made in dong.

Nguyen Tuan Anh, general director of the Ut Xi Seafood Processing Joint Stock Company, said the new foreign currency lending regulation forces exporters like his company to borrow dong loans.

"In the past, although we could borrow just 30 per cent of our working capital needs in foreign currency, it helped us cut costs significantly, "Anh said.

"Now, we have to borrow dong at high interest rates. This would raise our production costs to a much higher level, thus affecting our products' competitiveness over similar products made in Thailand, India and Bangladesh," he said.

A representative of a seafood export company in the southern province of An Giang also revealed that in 2011 his company was able to make profit mainly thanks to US dollar loans.

"The 9 or 10 per cent gap between the interest rates in dong and US dollar loans brought in VND10 billion per month for out company and ensured its maintenance," he said.

The new foreign currency lending regulation would encourage agricultural exporters to import raw materials from abroad to process instead of using domestic products, and therefore it would affect the country's foreign currency resources, he said.

Many economists have said that the new foreign currency lending regulation would impact enterprises in areas prioritised by the Government. They said that the foreign exchange earned by companies exporting agricultural products made with raw materials bought domestically was not used to pay material suppliers. The foreign currency was typically sold to the banks.

This meant that lending foreign currency to agricultural exporters did not affect the country's balance of payment in foreign currencies, while creating conditions for the companies to make profit and sustain themselves.

Gold trading deadline extended

The State Bank's Circular 12/2012/TT-NHNN, effective early last week, extended the deadline for credit institutions to cease mobilising and lending gold until November 25, rather than May 1 as stipulated in a previous circular.

From the new deadline, banks are only allowed to mobilise gold to serve its payment purposes.

The central bank asked credit institutions to build roadmaps to fulfil the requirement and said it would supervise their implementation.

In the meantime, it issued a directive guiding the implementation of regulations on the gold safekeeping service of these institutions.

The State Bank said some institutions were facing potential risks in the past months by offering dividends on gold deposits or mortgaging the metal to borrow money in dong or dollar from other institutions.

It requested these practices be stopped, asking clients to pay fees for the service, and credit institutions to list service charges publicly.

For derivative forms of gold dealing contracts such as futures, options and swap contracts, the central bank said deals were to be made only with its permission.

Pilot scheme to refund VAT

Effective the first of July, international tourists can claim refunds of value added tax that they have paid for purchases made in Viet Nam.

The new scheme, scheduled to last two years until June 30, 2014, will allow visitors to get back up to 85 per cent of the VAT they have paid. The remaining 15 per cent will go to the banks that help process the refund.

Tourists can claim VAT refunds at Tan Son Nhat Airport in HCM City or Noi Bai in Ha Noi.

Local retailers have been encouraged to join the pilot project designed to help them increase sales. A tax-free shopping sign will be displayed at the shops to attract shoppers' attention. Information about businesses joining the scheme will be uploaded by tax and customs authorities on their websites.

The VAT refund plan will be advertised on Viet Nam Airlines flights and other means of tourist transportation. Efforts are on to enable travellers to Viet Nam on board ships or overland routes to benefit from the scheme as well.

Last year, the country welcomed more than 6 million international arrivals. If each visitor spends US$300-500 on average during his or her stay in the country, local businesses will be able to post a turnover of between $1.8-3 billion.

HCM City firms to exhibit in Myanmar

HCM City-based manufacturing, services and tourism companies will showcase their products at an exhibition to be held in the Myanmar's capital Yangon from June 15 to 19.

The organiser, the HCM City Investment and Trade Promotional Centre (ITPC), told a press conference in HCM City that the Ho Chi Minh City Expo 2012 follows a successful exploratory trip to Myanmar by a business delegation last month.

HCM City and Yangon leaders had then signed agreements to promote their economic, cultural, and investment ties.

The five-day exhibition will offer Vietnamese businesses an opportunity to promote their products and look for partners to set up distribution networks in Myanmar.

Huynh Tan Phong, deputy director of ITPC, said some 160 booths would exhibit a range of products such as food, processed food, plastics, agricultural products, furniture, textile and garment, footwear, cosmetics, electronics, household appliances, and construction materials.

Tourism services and construction and computer software design services will also be showcased.

Besides the display of products, the event will also highlight HCM City's economic, political and socio-cultural achievements and the close ties between Viet Nam and Myanmar.

ITPC will survey Yangon and Mandalay for locations to establish a centre to sell and distribute Vietnamese products.

Property investors increase capital

Many real estate investors recently decided to increase investment capital amidst difficult economic conditions.

The move was deemed unavoidable against increased income costs associated with construction material and human resources, amongst others.

An investor of a project in District 2 of HCM City decided to raise capital by nearly 40 per cent from an initial US$90 million.

The decision was made after three years of operation and in sight of project completion.

The project investor cited high costs of construction materials, human resources and construction services, which increased by about 18-25 per cent, as the main reason for the move.

In the same situation, investors of a project in Ha Noi have poured more money into their project even though it too was close to being finished.

The project is located in Cau Giay District with a total capital of $67 million, which has doubled to $146 million.

Investors have also been forced to change their designs and cut down the scale of their projects.

A report from the Ministry of Planning and Investment's Foreign Investment Agency said that from the beginning of the year to the middle of last month, about 30 projects had asked for permission to increase their capital.

The additional capital was $368 million, the department said.

Director of the Nha Vui Company Nguyen Thu Phong said inflation in construction industry was much higher than the common level, which pushed the industry into difficulties.

The consumer price index (CPI) had been well controlled in the first quarter. However, prices of housing and construction materials as well as human resources had been upped by around 20 per cent, said Phong.

Agreeing with Phong, some experts said investors were under strong pressure because of low liquidity.

They added that capital increases were unavoidable.

It was a very tough decision to increase investment capital in the context of low liquidity and oversupply.

Last month, construction prices reduced month-on-month by 0.44 per cent. However, this reduction has not been strong enough to help the real estate market.

Animal feed imports fetch a total $618m

Viet Nam spent US$618 million to import animal feed in the first four months of this year, down 19.3 per cent from the same period last year, according to the Ministry of Agriculture and Rural Development.

Pham Duc Binh, deputy chairman of the Viet Nam Animal Feed Association, attributed the lower import value to decreasing prices of imported fodder and more abundant supply of products on the local market.

"Lower import prices stem from the reduced prices of raw materials for fodder. The materials include corn, cereal grains, soy-beans and cassava, among others," he said.

In addition, it was time for the harvest of cereal grains, potatoes, wheat and winter-spring rice crops. With the lower prices of paddy, many enterprises had selected paddy for fodder. Thus, the prices of final products also decreased, he said.

The great dependence on raw material imports for fodder has made final product prices in Viet Nam 10-15 per cent higher than in Thailand and China, he added.

Thus, supply of fodder on the local market was not enough to satisfy local demand. Le Ba Lich, chairman of the association, said: "Viet Nam has to import 35 per cent in volume and 45 per cent in value out of the total demand for the local market."

Lich attributed the dependence on imported materials to the fact that Viet Nam still lacks a master plan on land for material plantations.

He added that cassava was essential in feed processing and that the Ministry of Agriculture and Rural Development should map out specific plans for cassava plantations so as to meet local market demand as well as support a decrease in import taxes.

Last year, Viet Nam imported 8.9 million tonnes of raw materials for feed, totalling $3.7 billion. This volume accounted for up to 62 per cent of total demand.

Ministry mulls sinking $1.8 bln into loss-making shipping line

Although most of the vessels in the ship fleets of the Vietnam National Shipping Lines, or Vinalines, have been operating inefficiently, the Ministry of Transport plans to pour in another VND100 trillion, or US$1.8 billion, to “modernize the fleets” by 2020.

The ministry proposed an industrialization and modernization plan that included a two-phase investment into the state-run shipping giant, despite having many vessels reporting losses, being left unused, or being detained in other countries.

During the first phase, between 2012 and 2015, Vinalines will receive VND30 trillion to build and purchase 67 new vessels. In the next five years, the figures will rise to VND70 trillion, and 95 new ships.

The ministry also set a goal to increase the total loading capacity of its shipping fleet to 15 million tons, with the fleet consisting of all kinds of international-standard transporting vessels.

One of the most typical loss-making vessels of Vinalines is the Song Gianh ship, which has been left exposed to harsh weather in Ho Chi Minh City’s Nha Be District for years.

The 183-meter long, 25-meter wide vessel, whose entrance is now rusted, was launched in October 2006 by shipbuilder Nam Trieu Co with a loading capacity of 40 barges, each with an individual capacity of 200DWT (deadweight tonnage).

In February 2008, the $19.2-million Song Gianh ship was transferred to Vianshinlines, a subsidiary of Vinalines, and soon became a good for nothing giant.

There is now only one vice captain and four crewmembers left to take care of the ship.

“Our job is to protect the ship from burglars, cook, and play cards,” said sailor Hoang Dinh Long.

“The ship has been docked dormant for years and there is not yet any bright sign for its future.”

In fact, the only journey this ‘dead ship’ has ever made was transporting coal from northern Quang Ninh province to HCMC four years ago.

The ship earned VND1.8 billion from the trip, but the expense was more than double this meager profit.

“All machinery has broken, and the ship is now only home to mosquitos,” said vice captain Nguyen Van Thinh.

“We’d rather dock it dormant here than sailing since it will only bring in losses,” he added.

“All that can be done now is to sell the ship as scrap,” said a sailor, who wished to remain anonymous.

Sharing Song Gianh’s fate, the Vinashin Atlantic ship is still under construction, though it was expected to restart at the end of last February.

Vinashinlines bought the ship in 2007 for VND910 billion, and has since sunk another VND80 billion in efforts to repair it.

The VND1-trillion vessel is now 15 years old, and it is unlikely that any lessee will chose it, experts said.

“Some countries do not allow old vessels to enter,” they explained.

“Meanwhile, running a 150,000-ton ship only for domestic transportis is too wasteful.”

As of the end of last year, Vinalines’ shipping fleet had a total of 154 vessels, with a total loading capacity of 3.5 million tons, or 45 percent of the country’s total figure.

However, the national shipping line failed to exploit its vessels effectively, with many of its subsidiaries falling into financial troubles and steep losses.

Recently, the Vietnam Sea Transport and Chartering Joint Stock Company (VITRANSCHART), a subsidiary whose 60 percent stake is held by Vinalines, has sought buyers for two of its vessels to cut losses.

Earlier it sold three ships, yet still incurred a VND21.1-billion lost in Q1/2012.

Similarly, the Vietnam Ocean Shipping JSC, another Vinalines’ subsidiary, also had to sell three 27-year-old vessels last year due to ineffective exploitation.

The company also suffered a loss worth VND59.86 billion in the first quarter of this year.

Southern police unearth illegal gas trading ring

Following the discovery of illegal cooking gas extraction in the southern province of Dong Nai, the provincial economic police (PC46) announced on Saturday that they have unearthed a large-scale illegal gas trading racket.

“There’s now enough ground to confirm that the Gas Viet Co Ltd run by 48-year-old Dang Gia Tuong is operating a ring to illegally extract and trade cooking gas with modern technology,” PC46 said following a raid into the company’s facility.

Though having a license to trade gas, Gas Viet has established a system of tanks to illicitly extract gas at large scale, police said.

PC46 has confiscated eight machines used to extract gas, 230 filled and 385 empty cylinders, and thousands of seals, anti-counterfeit stamps, and labels of well-known brand names such as NT gas, V-gas, VT gas, Saigon Petro, or Petro gas.

Police also found labels of popular gas brands in five trucks that carried empty cylinders to fill at Gas Viet Co.

The truck drivers confessed that after being filled with gas from Gas Viet, there are some people in charge of placing the fake labels on the cylinders to dupe consumers.

At the house of Tuong in Bien Hoa City, police also found and seized 200 gas cylinders, 1,100 seals, and 100 anti-counterfeit stamps.

The officers went on to raid the warehouse of LPG CO Ltd in Long Binh Ward, Bien Hoa City, and the house of its director Nguyen Xuan Nam, and also seized a number of similar items.

“The cylinders were first imported via HCMC-based Cat Lai seaport, and sold to illicit gas extractors later,” Nam’s wife confessed to police.

Dong Nai Police said its force also conducted another raid into the extracting facility of gas trader Xuan Hang on May 4 while the inspection into Gas Viet Co progressed.

Nguyen Thanh Hai, 35, owner of the facility, failed to show any license for gas trading.

Police thus seized a tank truck that was delivering 10 tons of gas into the facility, and four other trucks, together with 145 filled and 616 empty cylinders.

The facility currently has six workers, who extract 300-1,000 cylinders, and place fake labels of well-known brand names on the products before sending them to the market, Hai told police.

“The products are sold at only VND280,000 a cylinder to small dealers, who will then sell to consumers at up to VND400,000 a 12-kg cylinder,” said Hai.

PC46 has detained 28 relevant individuals, and are waiting for the test results on the 20 tons of gas seized to detect their quality and trace their origin.

Jetstar offers discounts on domestic routes

Budget airline Jetstar Pacific will offer discounts on several domestic flights for a week on May 7-14 with attractive airfares to big cities in Vietnam.

At 2pm on May 7, Jetstar will sell tickets for the Ho Chi Minh City- Da Nang route starting atVND490,000 (US$23.5) one way for passengers who purchase tickets for two.

From 3am on May 8 until 8.59pm on May 9, tickets between Ho Chi Minh City and Hanoi, Vinh, Hai Phong will be on sale starting VND950,000 (US$45) one way for JetMail members.

The travel period is from September 5 to October 31 and payment in credit card, debit card or internet banking is accepted.

Jetstar Pacific, the first low cost air service provider in Vietnam, originated from Jetstar Airlines, 27 percent of whose shares belong to the Australian Qantas Group. Vietnamese shareholders, including State Capital Investment Corporation and Saigontourist Travel Service Company possess the rest.

Expert blasts ministry’s call for fuel price floatation

Economic expert Pham Chi Lan has criticized the Ministry of Industry and Trade’s recent request that asks the Government to let the market decide fuel prices rather than impose controls on them as done at the moment.

She descried the request as insincere and irresponsible, saying it is impossible to remove State controls on fuel prices given a current lack of market institutions.

The Ministry of Industry and Trade has proposed excluding fuels from the list of items whose prices are controlled by the Government, or else Government Decree 84 on fuel trading management does not work.

In the current circumstances, electricity and fuel prices should continue to be controlled because their influence on prices of other items and the economy as a whole remains great, she said.

She said 11 fuel wholesalers had so far failed to live up to their responsibilities that are to ensure transparency in their operations and give clear explanations of any of their decisions to hike prices. “As such, society has not been able to monitor what they are doing, so the State should play a role here,” Lan told the Daily in an interview.

However, the ministry, together with the Ministry of Finance, has not met people’s expectations of fuel price management, she said, but it is better than nothing.

Government Decree 84 is not a rational excuse for lifting State controls on fuel prices, said the expert, adding the decree could be adjusted to ensure it will work.

Fuel traders have complained authorities do not comply with regulations provided in Decree 84, so fuel prices are not market driven at present. Lan said there would be no market mechanism at work as long as monopolistic power still existed.

In fact, just three of the 11 key fuel traders have dominant market shares.

“When market institutions are not in place, the Government will still need to control prices to partially protect the interests of consumers,” said the expert.

She said if the trade ministry actually wanted fuel price controls removed, it should develop market institutions first. In other words, she noted, the ministry should roll out specific solutions before asking the Government to stop regulating fuel prices.

New fruit processing plant up and running soon

A second processing plant using hot steam technology to treat fruit for export to Japan and South Korea will become operational soon, according to the Plant Protection Department.

Good Life, a fruit treatment plant developed by a local company in the Saigon Hi-Tech Park, has been checked by local experts. However, it is waiting for recognition by the Japanese plant protection authority.

Binh Duong-based Yasaka was the first fruit processing enterprise to be allowed to ship dragon fruit to picky markets like Japan and South Korea.

Fruit importing countries such as Japan, South Korea, Australia and New Zealand have high quarantine standards for fruit originating in Asian countries. To make its way to these markets, Vietnam sought Japanese government help with fruit quarantine.

Through the Japan International Cooperation Agency, Japan transferred to the Plant Protection Department hot steam technology for removing pests and pest eggs from fruits between 2005 and 2008.

The department is working towards winning back the Taiwanese market for dragon fruit exports, which have been interrupted since 2009 due to pests.