Market value, volume rebound
 
Stocks recouped Monday's losses across the nation yesterday on improved trading volume and value.
 
On the HCM Stock Exchange, the benchmark VN-Index finished at 401.08 points, an increase of 0.34 per cent from the previous session. Market value grew 24.4 per cent to reach VND531.4 billion (US$25.3 million), while the volume of trades rose over 12 per cent to 37 million shares.

The VN-30 Index, which tracks the movements of the 30 leading shares by market capitalisation and liquidity, also rose 0.41 per cent to close at 449.31. Trading value on those 30 stocks, accounting for 57 per cent of total market value on the HCM City bourse, totalled over VND302 billion ($14.4 million).

Insurer Bao Viet Holdings (BVH) and Vietinbank (CTG) hit their ceiling prices, but food producer Masan Group (MSN), property developers Vincom (VIC) and Hoang Anh Gia Lai (HAG), and steelmaker Hoa Phat Group (HPG) lost from 0.5-2.1 per cent.

Other heavyweight codes Sacombank (ST), Vinamilk (VNM) and Eximbank (EIB) closed unchanged, of which the latter was the most active with 4.24 million shares changing hands.

On the Ha Noi Stock Exchange, the HNX-Index climbed 1.69 per cent to close at 62.53 points, with advancers edging decliners by 136-103.

Trading value grew by 15 per cent over yesterday to almost VND328.3 billion ($15.6 million) on a volume of 38.3 million shares.

PetroVietnam Construction (PVX) and VNDirect Securities (VND) saw the heaviest trades with over 5 million shares changing hands for each code. VNDhit its ceiling at VND8,100, while PVX also rose 4.9 per cent to close at VND8,600.

Viet Nam's market outlook was still positive, but investors should wait until inflation fell to below 12 per cent, when a sustainable rally would be formed, to buy shares, said Kim Eng Securities Co's head of research and analysis Michael Kokalari.

However, the rapid increase of the stock market in recent weeks might simply be a technical recovery after a long period declining, he added.

Kokalari also recommended investment in shares of the sectors that could help boost economic growth such as consumer goods, information technology and agriculture.

Vicofa to collect coffee export fees

The Viet Nam Coffee Industry Export Insurance Fund Management Council under the Viet Nam Coffee and Cocoa Association (Vicofa) has come to an agreement for collecting exported coffee fees of US$2 per tonne, to be effective on October 1, 2012.

Proceeds gathered will be invested into the industry according to a proportional distribution agreement, with 50 per cent given for replanting, 30 per cent for temporary reserve interest aid, 10 per cent for quality improvement, and 10 per cent for brand and trade promotions.

Special consumption tax exemption set

Commodities for export, including those sold to processing-exporting enterprises, will be exempt from special consumption tax, according to a circular issued recently by the Ministry of Finance.

To be eligible for exemption, firms must have sale or outsourcing contracts with foreign businesses, invoices of export or delivery, customs declaration papers for export or payment receipts from banks.

Amway Viet Nam opens Ha Noi office

Amway Viet Nam opened a new office in Ha Noi yesterday, "a milestone marking the development of the company", according to a spokesperson.

"I'm glad that after just a short period of time since opening, Viet Nam has become one of the strategic markets of Amway regionally as well as globally with strong growth potential," said Doug DeVos, CEO of Amway Corporation.

Established in Viet Nam in 2008, Amway Viet Nam has gradually built a distribution network throughout the country with increasing growth rate.

$47m glass container factory opens

A joint venture between a Vietnamese brewery and two foreign companies opened a glass container manufacturing plant yesterday in Ba Ria-Vung Tau Province.

O-I BJC Glass Viet Nam, a US$47 million venture between Owen Illinois of the US, Berli Jucker Corp of Thailand, and the Sai Gon Beer-Alcohol-Beverage Corp, will initially produce about 75,000 tonnes of mainly returnable glass containers annually for use in the food, drink, and pharmaceutical industries.

The plant, situated in the My Xuan A Industrial Park and with 450 workers, replaces a former production facility in HCM City's District 4 which was closed as part of the city's urban development plans.-

Viet Nam Airlines offers discounts

 An air-fare promotion campaign named "New Year's International Discount" from Viet Nam Airlines' (VNA) southern regional office has been launched and will end before the first day of April.

Air fares for flights from HCM City to Europe, Japan, and Korea will all be reduced. The ticket prices of flights from HCM City to Europe will be reduced by 46 per cent, about VND15 million (US$699).Travellers can also pay this same amount, a 39 per cent reduced price, for flights from HCM City to Moscow.

Flights from HCM City to Tokyo now hover around VND10 million (about $480), a 36 per cent drop. Flights from HCM City to Osaka, Fukuoka or Nagoya cost VND11 million (equivalent to $530), at a 30 per cent discount.

Travellers can pay around VND9,6 million (about $449), an 18 per cent decrease, when going from HCM City to Pusan or Seoul (Korea).-

Ha Noi lures nearly $100 million in FDI

Ha Noi attracted US$97.6 million in foreign direct investment (FDI) in January, bringing the total FDI in the capital city to $3.8 billion, Ha Noi Moi daily said.

Of the figure, 1.95 million came from newly licensed Japanese shoe maker O'Shoe, while the remaining came from three existing projects licensed to raise investment capital.

They include Teruno Viet Nam with $73.5 million, Nippon Mechatronics Viet Nam with $11.5 million, both from Japan, and Thailand invested CP Viet Nam Corporation, the daily said.

The capital last year licensed 344 foreign invested projects worth $1.5 billion, up 78.7 per cent over 2010.

Of the total, $957.1 million came from 283 newly licensed projects, while the remaining capital came from 61 existing ones.

The city's foreign-invested sector posted its highest industrial production growth rate at 16.4 per cent last year, followed by the non-State sector at 11.2 per cent and the State-owned sector at 7.5 per cent.

Software park urged to boost efficiency

Leaders of the HCM City have asked the Quang Trung Software Park and the Thu Thiem Urban Area to increase their operational efficiency this year.

During a visit last week to the Quang Trung Sofware Park, also known as Quang Trung Software City (QTSC), the Chairman of HCM City People's Committee, Le Hoang Quan, said the city would be able to make significant contributions to economic development, of the city in particular and the nation in general, by operating more efficiently.

Quan praised the efforts made by QTSC in the past years, saying it helped the city restructure its economy. It also emerged as the leading software park in the country, he said.

Located in HCM City's District 12, the park hosts a number of software companies and schools.

In 2011, a year of the global economic turmoil and domestic financial woes, QTSC achieved a growth of nearly 20 per cent over the previous year.

This year, it plans to further develop itself into one of the leading software parks not only in Viet Nam, but also in the region, officials said.

Quan told the park authorities to study IT industry support policies in other counties in the region and propose to the HCM City People's Committee initiatives for the development of the city's IT industry.

Meanwhile, the Thu Thiem Urban Area Management Board was asked to give priority to site clearance and resettlement of households affected by the project to develop Thu Thiem Peninsula into a new urban area in District 2.

In a meeting with the board on Thursday, the Deputy Chairman of HCM City People's Committee, Nguyen Huu Tin, said he had asked the city's Department of Transport to seriously inspect the capacity of contractors to undertake infrastructure development in the urban area.

Officials of the management board said compensation for site clearance and construction of another 2,500 apartments for affected families will be completed by the end of July 2012.

Steel makers face tough year
 
Steel manufacturers would face many difficulties this year after poor sales due to the global economic crisis and some would have to restructure, halt production or go bankrupt, according to the Viet Nam Steel Association.

The association predicts the demand for steel will remain low this year, rising only 4 per cent over last year. With this figure in mind, the industry plans to manufacture a mere 9.8 million tonnes this year.

Association chair Pham Chi Cuong said this year's growth rate was expected to be rather modest in comparison with the average 20 per cent during the peak sales period from 2005-09.

The poor performance stemmed from a frozen real estate market last year due to difficult economic conditions. To rein in inflation, the Government has cut public investment and halted or delayed unnecessary construction projects while residents have spent less on building activities.

As a result of the limited construction, some steel enterprises had to halt production or declare bankruptcy last year, including Van Loi Steel Co in Hai Phong City, Cuu Long Vinashin Steel Co, Dinh Vu Steel Joint stock Co in Hai Phong, among others.

Reduced consumption has led to 500,000 tonnes stockpile of steel, more than doubling inventory levels in recent years. As a result, producers can't pay back their loans and are paying up to VND150 billion (US$7.14 million) per month in interest, according to the association.

Input materials such as oil, coal, power, and imported materials cost 20-30 per cent more over one year earlier, creating additional problems.

According to the Ministry of Trade and Industry, Viet Nam has more than 65 steel producing facilities with an average annual design capacity of more than 100,000 tonnes each. Domestic investors operate 58 of the facilities while foreign investors operate the others with a combined investment capital of $21 billion.

One solution would be to restructure production and organisation in order to cut costs and to remove any ineffective projects, said Cuong.

"Last year, the industry produced about seven million tonnes, 1 per cent less than the previous year. Production in the early months of this year is expected to continue to decline due to the existing stockpiles and low demand," he said.

He also suggested export as another solution The sector exported two million tonnes of steel last year, earning nearly $2 billion, a year-on-year increase of 56 per cent.

However, the global economy was struggling last year, so Vietnamese companies faced low prices from some ASEAN nations and China while also dealing with the US anti-dumping lawsuit.

Deputy chairman of the association Nguyen Tien Nghi affirmed that no one would invest in the sector for the next several years because of the excess supply over demand.

Gov't urged to cut gas import tax
 
The Viet Nam Gas Association has proposed in an official letter to the Prime Minister and the Finance Ministry that the tax on imported gas be reduced from 5 per cent to 2 per cent.

If approved, each 12-kg gas cylinder would fall in price by VND7,000 to VND10,000.

The gas import tax went up 2-5 per cent on January 1.

"The proposed gas tax would reduce so-called gas fever, helping both enterprises and customers," said Nguyen Si Thang, chairman of the Viet Nam Gas Association.

The association said it would require its members to reduce prices if the lower tax was approved.

"It is the first time that the world gas price has gone up to US$1,000 per tonne, and it is expected to rise even further," Thang added.

The association's proposal will be considered soon.

"The target for tax policy in 2012 is to stabilise market prices and restrict inflation," said Luu Duc Huy, deputy head of the Finance Ministry's Tax Policy Department.

At the same time, two gas dealers, Dai Viet and Than Tai Gas, were fined between VND10 million and VND30 million each by HCM City's Finance Department because they increased prices without permission.

The municipal Market Management Office plans to increase inspections of petrol, oil and gas-related activities in the city.

Along with checking quality, licences, prices and safe conditions will also be examined.

Builders focus on low-cost housing
 
A growing number of domestic real estate developers in HCM City are focusing on the low-cost housing sector in an attempt to better survive during the current period of reduced property activity.

Thu Duc Housing Development Corp chairman and general director Le Chi Hieu said this year the company would tailor affordable apartments to cater for growing demand amongst workers.

Current, the company was offering apartments priced at VND16-17 million (US$762-810) per square metre and similar new products priced even lower would be available soon, Hieu said.

Following this trend, Hoang Anh Housing Development and Construction (HAGL Land) general director Le Hung said his company planned to sell new affordable apartments in the second half of the year.

Housing project apartments in the city's Tan Phu District would be sold at VND13 million ($620) per square metre while at two other projects in District 7, the price would be at VND20-22 million ($950-1.050) per square metre.

"Unlike our current products, new apartments will be smaller with an average area of 70sq.m," Hung said, adding that loans up to 70 per cent of property value would be offered.

In order to earn revenue amid a slump in the apartment market, new and different products must be created and introduced to the market, he said.

Meanwhile, the Phat Dat Real Estate Company has chosen another path. Board chairman Nguyen Van Dat said his company would begin developing Everich Apartment 3, with lower prices in District 7.

Everich Apartments 1 and 2 are now sold at VND25-35.5 million ($1,190-1,690) per square metre.

"We will offer unfurnished flats at compettive prices compared to those in the same area. After that, clients will be able to decorate flats themselves, based on their financial capacities," Dat explained.

Despite the current economic slump, Dat said he still believed quality products with reasonable prices would surely find clients.

This year and 2013 would see real estate developers increase efforts to develop new products and new business opportunities ahead of the expected market recovered in 2014-15, he said.

Real estate businesses who had decided to renew their product structures would create a positive conditions for this year, said ACB Real Estate Co general director Pham Van Hai.

While luxury apartment segments were sluggish due to capital shortages and difficulties in finding clients, medium-priced and low-cost apartments could be a bright spot for the market as this group would address a thirst for housing from those with a steady income, he concluded.

Real estate firms decry new home tax

The municipal Construction Department has proposed the collection of a housing tax in addition to levies collected on land, but real estate firms feel the time is not right for such a move.

The housing tax, which would be imposed on a progressive basis, aims to limit speculation, foster a healthy real estate market and generate more funds for the State budget, department officials have said.

Progressive taxation would mean those who own more houses would end up in higher tax brackets.

Some real estate firms and experts have expressed worries that the house tax would impose greater financial burdens on residents during tough economic times, the Thanh Nien (Young People) newspaper reported yesterday.

Experts say real estate speculation focuses on land, so the proposal envisages a kind of property tax, while high value assets like airplanes and yachts have not been taxed yet, according to the report.

It said most real estate companies thought this would not be the time to implement the housing tax proposal because it would make the situation worse for an already weak market.

Acknowledging that progressive housing tax would encourage land and house purchases for accommodation, experts said that the law allowed citizens to purchase these both for accommodation and as investment in assets.

Furthermore, there were already many real estate taxes, including a 2 per cent tax on land transfers or a 25 per cent tax on profits (based on current assessed value). The new proposal would cause prices to rise further, they contended.

"We need proper solutions at right time. If not, there will be serious consequences." said Nguyen Van Duc, vice chairman of the HCM City Real Estate Association.

Market brightens for industrial park developers

Things are looking up for the industrial park property market this year with many projects likely to be implemented with "multi-use" components, according to property service provider CB Richard Ellis (CBRE) Viet Nam.

Many developers believe IPs would be more successful with residential areas as well as industrial units, the company said in a summary of its quarterly report for HCM City.

Amata Industrial Park in the neighbouring province of Dong Nai can be an illustration of this predicted trend for 2012.

Huynh Ngoc Phien, Amata's general director, said investors in the IP (around 120, with almost half coming from Japan) will focus on their own business while others services were made available by the industrial park owner.

The industrial park is developing what he calls a "perfect city" project that includes residential and commercial facilities, schools, health care services and relaxation areas.

Another successful IP in Binh Duong Province, the Viet Nam – Singapore Industrial Park (VSIP), is also pursuing a similar policy, with commercial and residential projects underway.

"As interest in the industrial sector continues to increase, trends witnessed throughout 2011 strengthened in the fourth quarter," and were likely to persist in 2012, CBRE said.

It said there was continued interest in Viet Nam from manufacturers in Japan and Thailand. The natural disasters of last year have prompted tenants in these countries to seek opportunities to diversify risk.

Yet another trend likely to be seen in 2012 was an increase in pressure from authorities for factories within major cities to relocate to IPs, freeing land for infrastructure development and other uses, CBRE said.

It said last year's fourth quarter saw a slight drop from the third quarter in occupancy rates of IPs in HCM City, to 90.1 per cent, adding that this mainly resulted from an expansion of the Sai Gon Hi-tech Park that saw its occupancy rate fall by 20 per cent.

"The expansion, however, reflects continued confidence in the market as opposed to tenants leaving," the company said.

Meanwhile, land rates increased to US$194 per square meter per term (usually up to 50 years), up almost 42 per cent from the previous quarter.

In HCM City, this rise was mostly a reflection of movement at Tan Thuan Export and Processing Zone, where asking price almost doubled in the fourth quarter compared to the previous one.

Meanwhile, the rate for already built factories in the city's IPs did not change much, decreasing slightly to about $4.3 per square meter per term.

The CBRE survey of IPs in HCM City, Binh Duong, Dong Nai and Long An, which form the Southern Key Economic Region, found that the average land rate at major, stabilised IPs stood at $194 per square meter per term (usually up to 50 years) for HCM City, $56.57 for Binh Duong, $71.67 for Dong Nai and $73.33 for Long An.

Phu My Fertiliser profits up 91.1%

Phu My Fertiliser (DPM) reported a huge profit last year of over VND3.1 trillion (US$147.6 million), up 91.1 per cent compared to 2010. In the fourth quarter of last year alone, revenue reached VND2.1 trillion ($100 million) and net profit fetched VND932.7 billion ($44.4 million), doubling the figure from the same period in 2010.

The amount of cash and equivalents at end of last year hit around VND3.6 trillion ($171.4 million), rising by nearly VND800 billion ($38.1 million) compared to the earlier parts of the year.

FPT plans to form retail affiliate

Software company FPT has announced its intention to invest in FPT Retail Co as a founder. The software giant will contribute VND85 billion (US$4 million) to FPT Retail, holding a 85 per cent stake.

FPT general director Truong Dinh Anh will act as the representative for the contributed capital within the retail company.-

Troubled firms face challenging year

The Viet Nam Association of Financial Investors has told troubled businesses to sell major stakes to foreign investors, and even recommended delisting from the stock market, saying that this year would continue to be tough.

Management boards should publicise detailed information about their projects for shareholders, who should take caution when approving or rejecting projects.

In addition, shareholders should require their boards to issue short- and long-term targets in dividend payment and to set up business development funds from net profit.-

Beverage maker may have to delist

Sai Gon Beverage Co (TRI) may have to delist its shares from the HCM Stock Exchange as its accumulated losses last year exceeded its equity.

The company reported a loss of VND86.7 billion (US$4.1 million) due to a huge increase in sales expenses, causing its total accumulated losses to reach VND306.3 billion ($14.6 million). Meanwhile, TRI ended last year with VND20.5 billion (nearly $1 million) in negative equity.

Localities fail to report real estate price indices

Many cities and provinces failed to report on their 2011 property sector price indices by mid-January, as required by the Ministry of Construction's House and Real Estate Market Management Department, said head of the department Nguyen Manh Ha.

The index would reflect fluctuations in prices on the property market, including apartments, houses, land and offices for lease in each quarter and each year across the nation.

Moves to better manage FDI in property sector

The Ministry of Construction has required foreign-invested enterprises to report on their projects in order to build a plan for managing foreign direct investment in the property sector by May.

The resulting plan would attempt to increase the quality of foreign investment, improve the efficiency of State management and also develop foreign investment in the property trading sector towards to 2020.

Korean Development Bank to open office in HCM City

Korea Development Bank (KDB) has been allowed to open a representative office in HCM City under Licence 24/GP-NHNN signed by Governor of the State Bank of Viet Nam early this month.

In addition to its regular business functions, this office would act as a market research and liaison office, promote the construction of KDB investment projects in Viet Nam, and monitor agreements between Korean and Vietnamese interests.

Sagawa launches goods delivery services in VN

Japan's leading transportation company Sagawa Holdings Co Ltd (SGHD) has announced that it will launch delivery services in Viet Nam this month, and then officially beginning in March.

According to its plan, the SGHD will invest 100 million yen (US$1.2 million) this year to buy over 30 trucks and motorbikes and to hire about 100 employees for delivery services. It will initially deliver goods for businesses in Ha Noi and HCM City, and then plans to expand its services to other regions.

Viet Nam is the second foreign market where the SGHD is launching its services.

New urban area to be built in Ha Noi

A new urban area will be built in Ha Noi's Cau Giay and Tu Liem districts this year with investment capital of nearly VND8.4 trillion (US$401.5 million).

The Hai Dang area, which has investment from the Hai Dang Real Estate Investment Joint Stock Company, will be located on a 70,468sqm site. The finished project is expected to have more than 2,100 apartments, 14,000sqm for trees and 12,500sqm for traffic.

Construction work will begin in the first quarter of this year and complete in 2016.

Ha Noi okays road expansion

The Ha Noi People's Committee has approved a project to upgrade and expand belt road 3, which links Mai Dich Street in Cau Giay District to Noi Bai international airport.

The project, with capital investment of about VND2.4 trillion (US$115.2 million), will lengthen the belt road by more than three kilometres and widen it by about 68 metres along Mai Dich Street. New pavements, flyovers and other traffic infrastructure at Hoang Quoc Viet and Co Nhue intersections will also be built.

The project, which was invested by Lilama Urban Development Company, is expected to completed within two years.

The city authority has asked the investor to prepare for the required legal procedures. The municipal Department of Transport is responsible for conducting the project's compensation and site clearance.

Ministry promotes trade with Germany
 
While Germany is already the most important market in the European Union for Vietnamese exports, there's still huge potential for further increasing exports to Germany, said Do Thang Hai, head of the Ministry of Industry and Trade (MoIT)'s Trade Promotion Department.

Statistics from the ministry showed that last year export turnover to Germany reached US$3.35 billion, 41 per cent higher than 2010.

However, Hai said Vietnamese goods have not fully exploited their potential in the market despite seeing continuous growth in exports to Germany.

He said Vietnamese exports to Germany mainly included shoes, garments and textiles, coffee beans, wooden furniture, seafood and leather goods, while Viet Nam imported machinery, automobiles, pharmaceuticals and chemicals from Germany.

Figures from the HCM City Trade Promotion and Investment Centre showed that Germany accounted for 19 per cent of Vietnamese exports to the EU last year, and was Viet Nam's biggest trade partner in the area.

Accordingly, Viet Nam ranked 49th out of 147 countries that exported to Germany, 55th out of 144 countries to import German products and 47th out of 144 trade partners based on bilateral trade turnover.

Thomas Hundt, head of the German Trade and Investment Organisation in Viet Nam, said businesses should pay more attention to ensuring goods exported to the EU meet a raft of standards.

He said regulations on goods exported to Germany have been tightened to ensure quality, hygiene and corporate social responsibilities.

MoIT plans to organise more trade delegations to Germany to promote Vietnamese firms, while Vietnamese company VietHaus (SASCO) has built a commercial centre in Germany that will support Vietnamese firms doing business in Germany.

SASCO's deputy director Doan Thi Mai Huong said VietHaus would help enterprises to expand their businesses in the German market with the minimum of cost.

"The centre, which is scheduled to become operational in June, will showcase Vietnamese goods and provide information on German consumer habits," Huong said.

She said some Vietnamese goods including beer and coffee along with tourism services, have already been promoted at the centre.

"We will organise activities to introduce Vietnamese coffee next month on the occasion of the biggest fair in Berlin," she said.

The ministry in co-operation with Metro Cash&Carry Group and the Viet Nam Trade Counselor will organise Vietnamese Week in Germany from June 6-16 to introduce famous Vietnamese brandnames which meet EU standards, including pomelo fruit, Hoa Loc mangoes, Tien Giang papayas, shrimp, basa fish and Trung Nguyen coffee.

Germany has 161 projects in Viet Nam with total registered capital of $824 million, ranking 22 out of 91 countries and territories investing here.

In HCM City alone, there are 61 German-invested projects with total investment of $345 million.

Viet Nam has 10 projects in Germany with total registered capital of $25 million.

HCM City to probe firms trying to evade tax

Officials from the HCM City Department of Taxation said they would step up inspections of businesses that were believed to have reported losses for several years to enjoy lower tax rates.

Similar inspections in the last two years have yielded very good results, according to the department.

The practice of reporting losses to evade tax took place mostly in foreign direct invested (FDI) businesses, it said. One of the ruses used was to value imported materials much higher than actual cost and value exported final products at lower than normal prices.

The department said many companies had reported losses for years, sometimes of even higher value than their charter capital, but they had continued to expand production year after year.

In addition, companies that are subsidiaries of international companies often included in their accounts the expense of mother companies for advertising and promotion campaigns, as well as bank interest paid in other countries.

The department said such practices led to huge loss of taxation revenues, created an unequal business environment and triggered strikes among workers because they did not receive remuneration and bonuses commensurate with their work.

In 2010, the department investigated and inspected 90 businesses that admitted to incorrectly reporting losses to evade taxes. Overdue taxes worth VND360 billion (US$17 million) were levied on these companies. Last year, 203 businesses were inspected and VND1,08 trillion ($51 million) collected.

Thanks to the inspections, several companies that had not been inspected had corrected their accounting practices of their own volition, the department said.

Nguyen Trong Hanh, the department's deputy director, said they suggested that the General Department of Taxation set up specialised teams for this type of inspection.

The department also recommended that the Ministry of Finance set up a monitoring board to supervise this task from the central to local levels, Hanh said.

Ethanol plant produces first batch of bio-fuel
 
Dung Quat Bio-Ethanol Plant, located in the Dung Quat Industrial Zone in the central province of Quang Ngai, turned out its first batch of bio-ethanol E100 last week after 33 months of construction and trial operations.

The VND2 trillion (US$95.2 million) plant has a yearly designed capacity of 100 million litres of ethanol.

Ho Sy Long, the plant's director, said 10 per cent of the product would be used to produce Ethanol Fuel E5 while the remainder would be exported to ASEAN members, especially to the Philippines.

Long added that under its commitment, the plant would contribute to rural economic growth by consuming 17,000 hectares of cassava as soon as it came into stable operation. This scheme would create opportunities for local farmers to change their cultivation structure.

The plant is expected to meet domestic demand for bio-petrol, contributing to fuel savings and reducing environmental pollution while helping local farmers raise their income.

Eighty per cent of the 237 labourers employed so far by the plant have been local people.

The plant is scheduled to run at 65 per cent of its designed capacity (200 cubic metres a day) for one month before beginning full operations.

It will be handed over to the Central Petroleum Bio-ethanol Joint Stock Company, the investor, by the end of next month and inaugurated in May.

Construction of the plant began in April 2009.